Arq, Inc. Reports First Quarter 2025 Results

Arq, Inc., a producer of activated carbon and other environmentally efficient carbon products, has released its financial and operating results for the first quarter of 2025. The company reported significant growth and improvements across various financial metrics, driven by a turnaround in its Powder Activated Carbon (PAC) business and ongoing operational efficiencies.

Financial Highlights

For the quarter ended March 31, 2025, Arq, Inc. reported:

• Revenue of $27.2 million, a 25% increase compared to $21.7 million in the prior year period.
• Net income of $0.2 million, a significant improvement from a net loss of ($3.4) million in Q1 2024.
• Adjusted EBITDA of $4.1 million, marking the fourth consecutive quarter of positive Adjusted EBITDA.
• Gross margin of 36.4%, slightly down from 36.9% in the prior year period due to start-up costs associated with the granular activated carbon (GAC) line.
• Cash and restricted cash of $14.8 million as of March 31, 2025.

Business and Operational Highlights

Key business and operational developments include:

• Signed the second largest PAC contract in the company's history, indicating the sustainability and value of its foundational business.
• Completed mechanical construction of the GAC Facility in January 2025, with commercial production expected by the end of Q2 or early Q3 2025.
• Appointed Jay Voncannon as Chief Financial Officer, bringing 35 years of finance experience to oversee the company's next phase of growth.

Strategic Initiatives and Corporate Developments

Arq, Inc. continues to focus on strategic initiatives to drive growth and operational efficiency:

• Maintaining capital expenditure guidance for 2025 at $8 - $12 million.
• Confident in the ability to contract remaining GAC product volumes at attractive pricing once the GAC Facility is fully operational.
• Positioned as a fully vertically integrated domestic US supplier of activated carbon, which is expected to have a neutral to positive impact from international tariffs.

Management's Perspective

Bob Rasmus, CEO of Arq, commented on the results: "Our first quarter results demonstrate that the PAC business transformation is ongoing and sustainable. With our fourth consecutive quarter of positive Adjusted EBITDA and the recent signing of the second largest contract in company history, we have established a robust foundation capable of delivering double-digit millions in annual Adjusted EBITDA."

He added, "While we've made significant progress commissioning our GAC facility at Red River, we continue to work through the final commissioning process. Given these challenges, we now expect to achieve commercial production by the end of the second quarter or early third quarter. While this timeline represents a delay from our previous guidance, I remain fully confident in our technology and our team's ability to execute."

Future Outlook

Arq, Inc. has provided guidance for the next reporting period, anticipating the first commercial production of GAC by the end of Q2 or early Q3 2025. The company remains confident in its ability to successfully contract the remaining volumes at attractive pricing once the GAC Facility is fully operational.

SEC Filing: Arq, Inc. [ ARQ ] - 8-K - May. 07, 2025