Arq, Inc. Reports Net Income of $203,000 and 25% Revenue Growth in Q1 2025

Arq, Inc. reported a significant improvement in its financial performance for the first quarter of 2025, achieving a net income of $203,000 compared to a net loss of $3.4 million in the same period of 2024. The company's revenue increased by 25% to $27.2 million, up from $21.7 million, driven by higher sales volumes and improved pricing. The cost of revenue also rose, reflecting a 26% increase to $17.3 million, primarily due to increased production costs associated with higher demand for its activated carbon products.

In terms of operational efficiency, Arq managed to reduce its total operating expenses by 16%, from $11 million in Q1 2024 to $9.3 million in Q1 2025. This reduction was largely attributed to decreased selling, general, and administrative expenses, which fell by 21% to $6.1 million. The company also reported a decrease in research and development costs, which dropped by 46% to $874,000, indicating a strategic shift in resource allocation. The overall gross margin remained stable, despite the increased costs, as the company focused on optimizing its product mix.

Arq's operational metrics showed a positive trend, with increased customer demand particularly from coal-fired power generation clients, influenced by rising natural gas prices. The company reported that its primary markets, including the U.S. and Canada, contributed to the revenue growth, with U.S. sales reaching $24.6 million, up from $19.3 million in the previous year. The company also noted a strategic focus on expanding its product offerings, including the anticipated launch of its new granular activated carbon products, which are expected to begin production in the latter half of 2025.

The company’s balance sheet as of March 31, 2025, showed total assets of $283.7 million, slightly down from $284.4 million at the end of 2024. Total liabilities decreased to $65.5 million from $67.1 million, reflecting improved management of current liabilities. Cash and cash equivalents were reported at $6.3 million, down from $13.5 million, primarily due to increased working capital needs. The company also has $13.8 million available under its revolving credit facility, providing additional liquidity for ongoing operations and capital expenditures.

Looking ahead, Arq anticipates continued growth driven by regulatory changes, particularly the new PFAS drinking water regulations expected to increase demand for its products. The company is focused on enhancing its operational capabilities and expanding its market presence, particularly in the advanced purification technologies sector. Management expressed confidence that the strategic initiatives in place will support sustained revenue growth and improved profitability in the coming quarters.