I N V E S T O R P R E S E N T A T I O N Quest Resource Holding Corporation (NASDAQ: QRHC) 2025 *Adjusted EBITDA and Adjusted Net Income are Non-GAAP terms. © 2025 Quest Resource Holding Corporation. Copying, publishing or redistributing outside of Quest is strictly prohibited. 2 N o v e m b e r © 2022 Quest Resource Holding Corporation. Copying, publication or redistribution outside of Quest is strictly prohibited. © 2024 Quest Resource Holding Corporation. Copying, publishing or redistributing outside of Q ...

Core Insights - Quest Resource (QRHC) reported a quarterly loss of $0.02 per share, missing the Zacks Consensus Estimate of $0.01, and showing an improvement from a loss of $0.16 per share a year ago, resulting in an earnings surprise of -300.00% [1] - The company generated revenues of $63.34 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 6.83%, but down from $72.77 million in the same quarter last year [2] - Quest Resource shares have declined approximately 77.7% year-to-date, contrasting with the S&P 500's gain of 14.4% [3] Earnings Outlook - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is $0.02 on revenues of $62.76 million, while for the current fiscal year, the estimate is -$0.27 on revenues of $250.03 million [7] Industry Context - The Waste Removal Services industry, to which Quest Resource belongs, is currently ranked in the top 35% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

Financial Data and Key Metrics Changes - Revenue for the third quarter was $63.3 million, a 13% decrease year-over-year but a sequential increase of 6.4% compared to the second quarter [18] - Gross profit dollars totaled $11.5 million, a decline of 2% year-over-year but a sequential increase of 3.9% [20] - Gross margin was 18.1%, which was 200 basis points better than the prior year but a sequential decline of 40 basis points [20] - SG&A expenses were $9.2 million, a 10% reduction year-over-year [22] - Cash generated from operations was approximately $5.7 million, a sequential improvement of roughly 46% [23] Business Line Data and Key Metrics Changes - The decline in revenue was driven by the divested mall-related business and lower revenue from industrial clients due to challenging market conditions [18] - New clients added over $24 million in incremental revenue year-over-year, contributing to the sequential revenue growth [19] - The onboarding of new clients is progressing as planned, with gross margins from these clients showing consecutive gains [19] Market Data and Key Metrics Changes - Volumes from industrial customers remain subdued, and the pace of adding new clients has been slower than anticipated [9] - The company is focusing on diversifying its customer base by expanding into non-industrial end markets such as retail and hospitality [12] Company Strategy and Development Direction - The company is pursuing operational excellence initiatives aimed at standardizing processes and improving efficiencies [8][25] - A focus on share of wallet opportunities is being emphasized, with efforts to enhance collaboration between relationship managers and sales teams [9][10] - The company aims to broaden its customer base and expand service offerings to existing clients [12] Management's Comments on Operating Environment and Future Outlook - The macro environment remains challenging, but management believes that industrial markets are stabilizing [31] - The company expects to continue experiencing margin pressure but anticipates offsetting this through operational improvements and growing share of wallet with existing clients [17] - Management is confident in the company's ability to execute its value proposition and implement organic initiatives as macroeconomic conditions normalize [25] Other Important Information - The company has improved its vendor relationships, leading to the lowest service disruption rates in its history [15] - A subscription-like model for data access is being envisioned as a potential new revenue stream [16] Q&A Session Summary Question: How are the industrial end markets performing? - Management indicated that while the macroeconomic environment is uncertain, industrial markets are stabilizing, though seasonality will affect Q4 [31] Question: Has the strategy for expanding wallet share changed? - Management confirmed that a more disciplined approach has been implemented, focusing on collaboration between relationship managers and sales teams to enhance wallet share [33][34] Question: What are the expectations for operational improvements in Q4 and 2026? - Management emphasized continuous improvement and the implementation of KPIs to enhance operational performance, expecting positive impacts on financial results [37][45] Question: Can you provide an update on the vendor management platform? - Management reported that the vendor management platform is progressing well, contributing to improved relationships and reduced service disruptions [55] Question: What are the goals for debt reduction moving forward? - Management stated that aggressive debt reduction is a priority, with plans to pay down more expensive debt as cash generation improves [81]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $63.3 million, a 13% decrease year-over-year but a sequential increase of 6.4% compared to Q2 2025 [18] - Gross profit dollars totaled $11.5 million, a decline of 2% year-over-year but a sequential increase of 3.9% [20] - Gross margin was 18.1%, which was 200 basis points better than the prior year but a sequential decline of 40 basis points [20] - SG&A expenses were $9.2 million, a 10% reduction year-over-year [23] Business Line Data and Key Metrics Changes - The decline in revenue was driven by the divested mall-related business and lower revenue from industrial clients due to challenging market conditions [18] - New clients added over $24 million in incremental revenue year-over-year, contributing to the sequential revenue growth [19] - Gross margins with new clients have shown consecutive gains for multiple quarters, indicating a successful land and expand strategy [19] Market Data and Key Metrics Changes - Volumes from industrial customers remain subdued, and the pace of adding new clients has slowed compared to last year [9] - The company is focusing on diversifying its customer base by expanding into non-industrial end markets such as retail and hospitality [12] Company Strategy and Development Direction - The company is committed to pursuing business efficiencies, reducing variability, generating growth, and driving business margins [5] - A focus on share of wallet opportunities is being emphasized, with efforts to broaden the number of waste streams handled for individual clients [10] - The company is enhancing vendor relationships to improve service levels and reduce service disruption rates [14] Management's Comments on Operating Environment and Future Outlook - The macro environment continues to present challenges, but management believes that all markets are stabilizing [32] - The company expects to continue experiencing margin pressure but anticipates offsetting these pressures through operational improvements and growing share of wallet with existing clients [17] - Management is confident in the value of the asset-light model and the ability to deliver improved financial results [26] Other Important Information - The company generated approximately $5.7 million in cash from operations, a sequential improvement of roughly 46% [24] - As of the end of Q3, the company had $1.1 million in cash and approximately $20 million of available borrowing capacity [24] Q&A Session Summary Question: How are the industrial end markets holding up? - Management indicated that the macroeconomic environment is uncertain, but all markets, including industrial, are stabilizing. Seasonality effects are expected in Q4 [32] Question: Has the strategy for expanding wallet share changed? - Yes, the company has implemented a more disciplined approach to the sales process and is collaborating more effectively between relationship managers and sales teams [34] Question: What are the opportunities for operational improvement moving into 2026? - The company is focused on continuous improvement and has defined major processes with KPIs to ensure optimal performance [38] Question: Can you provide details on the new food win? - The new food win was a competitive win, representing about 20% of the customer's total portfolio, with higher initial margins than typical [42] Question: What is the outlook for debt reduction? - The company plans to continue paying down debt aggressively, with a preference for reducing more expensive debt after Q1 [72]

Core Insights - Quest Resource Holding Corporation reported a revenue of $63.3 million for Q3 2025, reflecting a 13.0% decrease compared to Q3 2024 but a 6.4% increase from Q2 2025 [5] - The company achieved an adjusted EBITDA of $2.9 million, up from $2.5 million in Q3 2024, indicating operational improvements [5] - Year-to-date, the company reduced its debt by $11.2 million, representing a 14% reduction, and improved operating cash flow by 45% to $5.7 million in Q3 2025 [5][6] Financial Performance - Revenue for the nine months ended September 30, 2025, was $191.3 million, a 12.5% decrease from the same period in 2024 [5] - Gross profit for Q3 2025 was $11.5 million, a 2.0% decrease from Q3 2024, but a 3.9% increase from Q2 2025 [5] - The GAAP net loss for Q3 2025 was $(1.3) million, an improvement from a net loss of $(3.4) million in Q3 2024 [5] Strategic Initiatives - The company is implementing strategic actions to enhance operational efficiencies, which are beginning to show positive results in financial performance [4] - Quest's CEO highlighted the effectiveness of Operational Excellence initiatives in improving customer visibility and sales productivity [6] - The company signed a new contract in the food products sector, contributing to organic growth [5] Market Position - Quest is positioned as a national leader in environmental waste and recycling services, focusing on helping businesses meet their sustainability goals [8] - The company aims to provide tailored solutions across various industry sectors, enhancing its competitive edge in the market [8]

Revenue Performance - Revenue for Q3 2025 was $63.3 million, a decrease of $9.5 million or 13.0% compared to $72.8 million in Q3 2024[86] - For the nine months ended September 30, 2025, revenue was $191.3 million, down $27.3 million or 12.5% from $218.6 million in the same period of 2024[86] - The decline in Q3 revenue was primarily due to the divestiture of the mall-related business and softness in the industrial end market, reducing revenue by approximately $3.0 million and $6.0 million, respectively[87] Profitability - Gross profit for Q3 2025 was $11.5 million, compared to $11.7 million in Q3 2024, with a gross profit margin improvement to 18.1% from 16.1%[91] - Net loss for Q3 2025 was $(1.3) million, an improvement from a net loss of $(3.4) million in Q3 2024[104] - Adjusted EBITDA for the three months ended September 30, 2025, increased by 15.9% to $2.94 million from $2.53 million in the same period of 2024, while it decreased by 43.9% to $7.18 million for the nine months ended September 30, 2025, from $12.79 million in 2024[108][110] Expenses - Operating expenses for Q3 2025 were $10.4 million, down from $12.6 million in Q3 2024, reflecting efficiency initiatives[94] - Selling, general, and administrative expenses for Q3 2025 were $9.2 million, down from $10.3 million in Q3 2024, due to lower labor-related costs[95] - Interest expense decreased to $2.4 million in Q3 2025 from $2.7 million in Q3 2024, primarily due to lower interest rates[101] Asset and Cash Management - The company recognized a $4.4 million loss on the sale of assets in the nine months ended September 30, 2025, related to the mall-related business[99] - Net cash provided by operating activities was $8.5 million for the nine months ended September 30, 2025, compared to net cash used of $(1.3) million for the same period in 2024[117] - Cash provided by investing activities for the nine months ended September 30, 2025, was $3.9 million, primarily from $5.0 million in proceeds from the sale of mall-related business assets[120] - Net cash used in financing activities for the nine months ended September 30, 2025, was $(11.7) million, primarily from $4.7 million in repayments of notes payable and net repayments of $7.0 million on the ABL Facility[121] Working Capital and Financial Position - As of September 30, 2025, working capital was $13.2 million, including $1.1 million of cash and cash equivalents, down from $30.7 million as of December 31, 2024[113] - The company believes existing cash and cash equivalents, along with borrowing availability under the $45.0 million ABL Facility, will be sufficient to fund operations for the next 12 months[115] Impairment and Losses - The company recorded a $1.7 million impairment charge in Q1 2025 associated with certain customer relationship intangible assets[100] - The company experienced a non-cash impairment loss of $1.7 million and a loss on the sale of assets of $4.3 million during the nine months ended September 30, 2025[124] - Net loss attributable to common stockholders was $(1.35) million for the three months ended September 30, 2025, compared to $(3.39) million for the same period in 2024, and $(13.73) million for the nine months ended September 30, 2025, compared to $(5.56) million for the same period in 2024[106][124] Shareholder Information - The weighted average number of shares outstanding was approximately 21.03 million for the three months ended September 30, 2025, compared to 20.67 million for the same period in 2024[107][112] - Adjusted net loss for the three months ended September 30, 2025, was $(0.4) million, compared to $(1.1) million for the same period in 2024, and $(4.1) million for the nine months ended September 30, 2025, compared to $1.2 million for the same period in 2024[111][112]

Financial Performance - Revenue for Q3 2025 was $63.3 million, a 6.4% increase from Q2 2025 but a 13.0% decrease compared to Q3 2024[4] - Adjusted EBITDA for Q3 2025 was $2.9 million, up from $2.5 million in Q3 2024, while year-to-date Adjusted EBITDA was $7.2 million compared to $12.8 million in the same period of 2024[4] - GAAP net loss for Q3 2025 was $(1.3) million, an improvement from a net loss of $(3.4) million in Q3 2024, with net loss per share improving to $(0.06) from $(0.16)[4] - Gross profit for Q3 2025 was $11.5 million, a 3.9% increase from Q2 2025, with a gross margin of 18.1% compared to 16.1% in Q3 2024[4] - Operating cash flow for Q3 2025 was $5.7 million, representing a 45% improvement from the prior quarter, bringing the year-to-date total to $8.5 million[1] Debt and Asset Management - Year-to-date debt reduction reached $11.2 million, marking a 14% decrease[4] - The company recognized a non-cash loss on the sale of assets of $4.3 million related to the sale of the tenant-direct mall portion of RWS during Q1 2025[4] - Total current assets decreased from $75,139 million as of December 31, 2024, to $54,012 million as of September 30, 2025, representing a decline of approximately 28.1%[19] - Cash and cash equivalents increased significantly from $396 million in December 31, 2024, to $1,146 million in September 30, 2025, showing a growth of 189.4%[19] - Accounts receivable decreased from $62,252 million to $50,746 million, a reduction of about 18.5%[19] - Total liabilities decreased from $121,489 million to $107,276 million, reflecting a decline of approximately 11.7%[19] - Stockholders' equity decreased from $54,156 million to $42,009 million, a drop of about 22.4%[19] - The accumulated deficit increased from $(125,111) million to $(138,837) million, indicating a worsening of approximately 11.0%[19] - Goodwill remained constant at $81,065 million for both periods, indicating stability in this asset category[19] - Total assets decreased from $175,645 million to $149,285 million, a decline of approximately 15.0%[19] - Current liabilities decreased from $44,391 million to $40,798 million, a reduction of about 8.9%[19] - Additional paid-in capital increased from $179,246 million to $180,825 million, showing a slight growth of 0.9%[19] Business Development - The company signed a new contract in the food products end market, driving incremental organic growth[4] - The sales pipeline remains active and growing, with ongoing onboarding of recent client wins[5] - The company expressed confidence in maintaining momentum and driving improvements as it heads into 2026[5]

Group 1 - Quest Resource is expected to report earnings with a projected revenue decline of 17.8% year on year to $59.83 million, contrasting with a 3.3% increase in the same quarter last year [2][3] - Last quarter, Quest Resource missed analysts' revenue expectations by 17.9%, reporting revenues of $59.54 million, which is an 18.6% decrease year on year [1][3] - Analysts have generally reconfirmed their estimates for Quest Resource over the last 30 days, indicating expectations for the company to maintain its course heading into earnings [3] Group 2 - In the waste management segment, peers like Montrose and Waste Connections reported positive results, with Montrose achieving year-on-year revenue growth of 25.9% and Waste Connections reporting a 5.1% increase [4] - Positive sentiment in the waste management sector is reflected in an average share price increase of 2.2% over the last month, with Quest Resource's shares up 10.5% during the same period [5] - The average analyst price target for Quest Resource is $3.08, significantly higher than its current share price of $1.47 [5]

Core Viewpoint - Quest Resource Holding Corporation is set to release its third quarter financial results on November 10, 2025, after market close, indicating ongoing transparency and communication with investors [1]. Financial Results Announcement - The financial results for the third quarter ended September 30, 2025, will be announced on November 10, 2025, after market close [1]. - A conference call will be held on the same day at 5:00 PM ET to discuss the financial results and business outlook [2]. Conference Call Details - Investors can participate in the live call by dialing 1-800-717-1738 or 1-646-307-1865 [2]. - The call will also be accessible through a listen-only webcast on the investor relations section of Quest's website [2]. Webcast and Playback Information - The webcast may 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 November 24, 2025 [3]. Company Overview - Quest Resource Holding Corporation is a national provider of waste and recycling services, focusing on helping larger businesses achieve their environmental and sustainability goals [4]. - The company offers tailored solutions across various industry sectors, providing actionable data to improve business operations and sustainability outcomes [4].

Core Insights - The stock price of the company has experienced a significant decline, falling nearly 80% since the last analysis, with a drop of 20-30% on the first day after the results were announced [1]. Group 1: Investment Philosophy - The investment approach focuses on operational aspects and long-term earnings potential rather than market-driven dynamics [1]. - The strategy emphasizes holding companies for the long term, with most recommendations being holds rather than buys [1]. - The analysis aims to provide valuable information for future investors and introduce skepticism in a generally bullish market [1].