Arq, Inc. Reports 7% Revenue Increase to $29.1 Million, Faces Net Loss in Q1 2026

Arq, Inc. reported its financial results for the first quarter of 2026, revealing a revenue increase of 7% to $29.1 million, compared to $27.2 million in the same period last year. The company experienced a net loss of $842,000, a decline from a net income of $203,000 in the first quarter of 2025. The increase in revenue was primarily driven by higher sales volumes of activated carbon products, particularly in the power generation sector, which benefited from elevated natural gas prices. However, the company also faced a 10% rise in the cost of revenue, which reached $19.1 million, largely due to increased operational costs associated with its GAC production.

In terms of operational metrics, Arq's total current assets increased to $46.1 million as of March 31, 2026, up from $43.9 million at the end of 2025. This growth was supported by a rise in inventories, which reached $19.9 million, compared to $15.9 million in the previous quarter. The company’s total liabilities also increased to $64.3 million, up from $62.6 million, reflecting higher accounts payable and accrued expenses. The company’s stockholders' equity slightly decreased to $167.8 million from $168.0 million, primarily due to the net loss incurred during the quarter.

Strategically, Arq has paused production at its GAC Facility and is conducting a comprehensive engineering and production process optimization review. This decision follows the identification of design flaws that hindered the facility's ability to reach its intended production capacity. The company plans to transition from using Corbin Wetcake to a more reliable bituminous coal feedstock for GAC production, which is expected to address previous operational challenges. Additionally, Arq is exploring new market opportunities for Corbin Wetcake, including its potential use in asphalt and synthetic graphite applications.

The company’s workforce remains stable, with a slight increase in employee headcount to support ongoing operations. As of March 31, 2026, Arq had approximately 42,900 shares outstanding, reflecting a modest increase in common stock issued. Looking ahead, Arq anticipates that demand for its activated carbon products will continue to grow, driven by macroeconomic trends and regulatory pressures for cleaner energy sources. However, the company also acknowledges the challenges posed by fluctuating natural gas prices and the need for operational improvements to enhance profitability. The management remains optimistic about the long-term prospects of its business, particularly as it navigates the current operational adjustments and market conditions.