Financial Data and Key Metrics Changes - Consolidated revenues for Q3 2025 declined slightly to $7.5 million from $7.9 million in the prior year period due to lower APC segment revenues, partially offset by higher Fuel Chem segment revenue [30] - Consolidated gross margin rose to 49% of revenues from 43% in the prior year, driven by increases in both Fuel Chem and APC segment gross margins [30] - Net income for Q3 2025 was $303,000 or $0.01 per share, compared to a net income of $80,000 or $0.00 per share in the prior year [32] Business Line Data and Key Metrics Changes - Fuel Chem segment revenue improved to $4.8 million from $4.6 million, while APC segment revenue declined to $2.7 million from $3.2 million due to timing of project execution [30][31] - Fuel Chem's full year 2025 segment revenue is now expected to approximate $16.5 million-$17 million, up from prior guidance of $15 million-$16 million [17] - APC segment backlog increased to $9.5 million at the end of Q3 2025, up from $6.2 million at the end of 2024 [31] Market Data and Key Metrics Changes - The company is pursuing $3 million-$5 million of potential additional APC contracts expected to close before the end of the year or early Q1 2026 [18] - The sales pipeline for data center opportunities is valued at approximately $80 million-$100 million, with eight to ten opportunities currently being pursued [24][44] Company Strategy and Development Direction - The company is focusing on expanding its APC portfolio through strategic acquisitions, including a recent acquisition of complementary intellectual property from Walco Inc. for $350,000 [18][19] - The company is actively pursuing opportunities driven by industrial expansion globally and state-specific regulatory requirements in the U.S. [19][22] - The company is experiencing increased demand for power generation driven by the digital economy, including AI and data centers [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining a strong financial position and funding growth initiatives across Fuel Chem, APC, and DGI business segments [34] - The company anticipates revenues for 2025 to be approximately $27 million, representing an 8% increase over 2024 [29] - Management noted that the APC landscape of opportunities is the best seen in several years, with expectations for strong performance in 2026 [57] Other Important Information - The company has no long-term debt and total cash and investments were $33.8 million as of September 30, 2025 [33] - The company is continuing an extended demonstration of its Dissolved Gas Infusion technology at a fish hatchery, expected to last until the end of Q1 2026 [27] Q&A Session Summary Question: Will additional investments be needed to monetize the recent acquisition? - Management does not expect significant additional investments to capitalize on the acquired IP, with some small contributions expected relatively quickly from aftermarket opportunities [39] Question: What is the timeline for data center opportunities? - Management expects responses on two to three commercial opportunities by late this year or early Q1 2026, while other opportunities will take longer to develop [48] Question: How large is the current pipeline for data center opportunities? - The current pipeline consists of eight to ten opportunities valued at $80 million-$100 million, with some expected to finalize by the end of the year or early 2026 [44] Question: How has cash flow performed in the last three quarters? - Management indicated that cash balance is expected to be flat to slightly down by the end of the year, with Q3 typically being the best performing quarter [52] Question: Does the current pipeline include data center opportunities? - The current pipeline of $80 million-$100 million is specifically for data center opportunities, with an additional $10 million-$20 million for standard APC business [55]

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]

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]