Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $29 million, representing a 13% year-over-year increase, driven by enhanced contract terms and a 9% growth in average selling price (ASP) [22][6][5] - Adjusted EBITDA was approximately $3.7 million, compared to $1.1 million in the prior year, marking a more than 3x increase [23][6] - Gross margin for the quarter was approximately 33%, slightly higher than in 2024 [22] Business Line Data and Key Metrics Changes - The PAC (Powdered Activated Carbon) business has shown a successful turnaround, with all sales contracts now being net contributors in 2025, a significant improvement from 24% of volumes being loss-making as of December 2022 [24][6] - The GAC (Granular Activated Carbon) line has been successfully commissioned, with a nameplate capacity of 25 million pounds expected to be reached within six months [5][12] Market Data and Key Metrics Changes - The company has reduced its exposure to the mercury emissions market to under 40% of volumes, diversifying into new markets for both PAC and GAC, which improves margins and overall financial performance [8][9] - The granular activated carbon market is experiencing persistent supply shortages, with demand expected to grow significantly due to regulatory changes related to PFAS [10][11] Company Strategy and Development Direction - The company aims to enhance profitability through operational optimization and cost reduction initiatives while expanding into higher growth, higher margin GAC business [7][29] - Plans for a second GAC line are underway, with a final investment decision expected by the end of 2025 [14][29] Management's Comments on Operating Environment and Future Outlook - Management views the current regulatory environment as favorable, with the EPA's pragmatic approach to PFAS regulation seen as beneficial for the business [18][19] - The company is confident in its ability to finance future growth through cash flow generation and existing debt facilities, without the need for further equity issuance [66][68] Other Important Information - The company is engaged in testing programs for asphalt emulsion, which could represent a significant future revenue source [20][78] - The company has reiterated its 2025 capital expenditure forecast of between $8 million and $12 million [26] Q&A Session Summary Question: Can you elaborate on the key milestones in the commissioning process at Red River? - Management confirmed that the operations team is focused on reaching full nameplate capacity of 25 million pounds as quickly as possible, with ongoing tweaks to improve production rates [35][36] Question: What is the expected cost for the second GAC line? - Management indicated that costs are being evaluated and enhancements from the first line will likely reduce expenses for the second line [39][40] Question: What is the timeline for moving from initial sales to contracts in the RNG market? - The timeline varies from one to eight months depending on customer testing requirements, with a focus on maintaining a balanced customer mix across different industries [41][43] Question: What impact did commissioning have on gross margins? - Approximately $1.9 million in costs associated with preproduction inventory were reclassified to R&D expenses, with gross margins expected to remain above 33% going forward [46][47] Question: How confident is the company in financing the second line without issuing equity? - Management expressed confidence in financing through cash flow generation and debt availability, emphasizing a gradual investment approach [66][68]

Increased revenue 13% YoY and maintained sustained PAC price improvement Delivered 5th consecutive quarter of positive Adjusted EBITDA – up >200% YoY Achieved major milestone with the commissioning of 1st GAC line at Red River Targeting final investment decision (FID) for 2nd GAC line prior to year-end 2025 GREENWOOD VILLAGE, Colo., Aug. 11, 2025 (GLOBE NEWSWIRE) -- Arq, Inc. (NASDAQ: ARQ) (the “Company” or “Arq”), a producer of activated carbon and other environmentally efficient carbon products for use in ...

Core Viewpoint - Arq, Inc. will release its second quarter 2025 financial results on August 11, 2025, and will hold a conference call to discuss the results on August 12, 2025 [1]. Financial Results Announcement - The financial results for the period ended June 30, 2025, will be filed in the Quarterly Report on Form 10-Q [1]. - The conference call is scheduled for 8:30 a.m. Eastern Time on August 12, 2025 [1]. Conference Call Participation - Interested parties can access the conference call via the Investor Resources section of Arq's website or by registering through a provided link [2]. - The live conference call can also be accessed by dialing specific phone numbers and referencing Arq [2]. Supplemental Information - A supplemental investor presentation will be available on the Company's website prior to the conference call [3]. - A replay of the conference call will be accessible shortly after the event, with specific dial-in details provided [3]. Company Overview - Arq is a diversified environmental technology company focused on producing activated carbon and other environmentally efficient products [4]. - The company is the only vertically integrated producer of activated carbon products in North America, ensuring a reliable domestic supply [4]. - Arq aims to develop innovative solutions to remove harmful chemicals and pollutants from water, land, and air [4].

Financial Data and Key Metrics Changes - The company reported revenue of $27.2 million for Q1 2025, a 25% increase compared to the prior year period, driven by a 13% growth in average selling price (ASP) and higher volumes [8][30] - Adjusted EBITDA for the quarter was approximately $4.1 million, a significant improvement from an adjusted EBITDA loss of $0.4 million in the prior year [31][32] - Net income was $200,000, compared to a net loss of $3.4 million in Q1 2024, indicating a turnaround in financial performance [32] Business Line Data and Key Metrics Changes - The PAC business has shown a sustained turnaround with four consecutive quarters of positive adjusted EBITDA, indicating a robust foundation for overall operations [6][11] - The gross margin for Q1 2025 was approximately 36.4%, consistent with the previous year, despite startup costs associated with the GAC line [10][30] - The company achieved its eighth consecutive quarter of double-digit year-over-year percentage growth in ASP, reflecting strong demand for PAC products [9][30] Market Data and Key Metrics Changes - Demand for PAC products remains robust, with a strategic diversification beyond mercury emission solutions to reduce exposure to coal-fired power plant demand fluctuations [9][24] - The company anticipates a supply-demand imbalance to persist through at least 2027 or 2028, which is favorable for its market position [26][100] - The recent EPA comments on PFAS regulation align with the company's mission, indicating strong customer momentum in PFAS mitigation adoption [24][78] Company Strategy and Development Direction - The company is focused on further cost optimization and strategic price management to enhance profitability in its PAC business while pursuing growth initiatives in GAC, asphalt, and rare earth minerals [6][28] - The introduction of a new Chief Financial Officer is expected to strengthen the finance organization and support future growth [36][39] - The company is exploring opportunities in domestic rare earth minerals and synthetic graphite, which aligns with government initiatives [28][91] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in overcoming commissioning challenges for the GAC production line, with full commissioning and first commercial production now estimated by the end of Q2 or early Q3 2025 [21][22] - Despite setbacks, management remains optimistic about the long-term potential of GAC and its role as a growth engine for the company [29][107] - The company is committed to keeping stakeholders informed of material developments as it progresses towards commercial production [42][108] Other Important Information - The company ended Q1 2025 with cash of $14.8 million, of which approximately $6.3 million is unrestricted, and reiterated its CapEx forecast of $8 million to $12 million for 2025 [35] - The company has identified additional opportunities to reduce operating costs and SG&A, which will further enhance profitability [10][33] Q&A Session Summary Question: Can you elaborate on the commissioning process and the root cause of the inconsistencies? - Management confirmed that the primary area of emphasis is related to optimizing the binding and shaping process in Zone 3, which has required adjustments to improve consistency and efficiency [45][48] Question: What gives you confidence that the new timelines will be met? - Management stated that the mechanical process works, and they have produced small-scale GAC, but they are focused on optimizing the speed and consistency of production to achieve full commercial production [51][72] Question: Are there any take or pay benefits in the quarter? - Management confirmed that there were no take or pay impacts to the Q1 results [62] Question: What percentage of Phase One production is currently contracted? - Management indicated that approximately 60% of Phase One production is contracted, with a focus on the RNG market due to higher margins [102]

Core Insights - Arq, Inc. achieved 8 consecutive quarters of double-digit year-over-year average sales price (ASP) growth, with a strong gross margin of 36.4% and positive adjusted EBITDA for four consecutive quarters, indicating a solid financial performance [1][5][14] - The company signed the second largest PAC contract in its history, showcasing the sustainability and value of its foundational business [1][6] - The timeline for the first commercial GAC production at the Red River facility has been updated to the end of Q2 or early Q3 2025 [1][6] - Jay Voncannon has been appointed as Chief Financial Officer, bringing 35 years of finance experience to oversee the company's transformation and growth [1][6] Financial Highlights - Revenue for Q1 2025 was $27.2 million, a 25% increase from $21.7 million in the prior year, driven by higher ASP, positive product mix changes, and increased volumes sold [5][8] - ASP increased by approximately 13% in Q1 2025 compared to the prior year, marking the eighth consecutive quarter of double-digit year-over-year growth [5][8] - Gross margin was 36.4% in Q1 2025, slightly down from 36.9% in the prior year, influenced by improved pricing and customer mix, offset by start-up costs related to the GAC line [10][13] - Net income for Q1 2025 was $0.2 million, a significant improvement from a net loss of $3.4 million in the prior year [13][14] - Adjusted EBITDA for Q1 2025 was $4.1 million, compared to an adjusted EBITDA loss of $0.4 million in the prior year, reflecting four consecutive quarters of positive adjusted EBITDA [14][15] Operational Highlights - All powder activated carbon (PAC) contracts are now net cash producers following the resolution of negative margin agreements as of December 31, 2024 [5] - The company completed mechanical construction of the GAC facility in January 2025, with small non-commercial scale volumes produced, but not yet at the consistency required for commercial production [6][7] - The company maintains a guidance of a 3-6 month ramp-up phase to reach a 25-million-pound nameplate capacity at Red River after the first commercial production [6] Capital Expenditures and Balance Sheet - Capital expenditures for 2025 are forecasted to remain between $8 million and $12 million, with $3.7 million spent in Q1 2025 [16] - As of March 31, 2025, cash and restricted cash totaled $14.8 million, down from $22.2 million as of December 31, 2024, primarily due to capital expenditures and inventory buildup [16] - Total debt, including financing leases, was $26.8 million as of March 31, 2025, an increase from $24.8 million as of December 31, 2024, driven by the revolving credit facility [17]