Arq, Inc. Reports 13% Revenue Growth and $2.1 Million Net Loss in Q2 2025

Arq, Inc. reported its financial results for the second quarter of 2025, revealing a revenue increase of 13% to $28.6 million compared to $25.4 million in the same period last year. For the first half of 2025, revenue rose 18% to $55.8 million from $47.1 million in the prior year. Despite the revenue growth, the company recorded a net loss of $2.1 million for the quarter, slightly higher than the $2.0 million loss in Q2 2024. The six-month net loss was $1.9 million, a significant improvement from a loss of $5.4 million in the same period last year. The increase in revenue was attributed to higher sales volumes and improved pricing, driven by increased demand from power generation customers amid rising natural gas prices.

In terms of operational metrics, Arq's total current assets decreased to $50.7 million as of June 30, 2025, down from $52.4 million at the end of 2024. The company reported a notable increase in inventories, which rose to $20.8 million from $19.3 million, reflecting a strategic decision to bolster stock levels in anticipation of future demand. The company’s cash reserves also decreased to $7.0 million, down from $13.5 million at the end of 2024, while restricted cash remained stable at $8.5 million. The total liabilities increased slightly to $67.8 million from $67.1 million, primarily due to higher borrowings under the revolving credit facility.

Arq has made significant strides in its operational capabilities, including the commissioning of its Corbin Facility in January 2025 and the completion of the Red River Plant expansion in August 2025. The company anticipates that the new GAC products produced at the Red River Plant will enhance its market offerings and drive future revenue growth. Additionally, the company is exploring new applications for its Arq Powder, which is expected to have a lower carbon footprint compared to conventional materials, potentially opening new markets.

The company’s strategic focus on research and development is evident, with R&D expenses increasing to $2.7 million in Q2 2025 from $929,000 in the same quarter last year. This increase is largely due to costs associated with pre-production testing of the GAC Facility. Selling, general, and administrative expenses decreased by 16% to $5.9 million, reflecting cost management efforts. The company continues to navigate challenges related to market conditions and regulatory changes, particularly in the context of the EPA's new PFAS regulations, which are expected to drive demand for its products in the water purification market.

Looking ahead, Arq remains optimistic about its growth trajectory, anticipating that the demand for its activated carbon products will continue to rise due to regulatory pressures and market dynamics. The company expects to leverage its expanded production capabilities and product offerings to capture a larger share of the advanced purification technologies market. However, it acknowledges the potential risks associated with fluctuating natural gas prices and competition from alternative energy sources, which could impact future performance.