Quest Resource Holding Corporation Reports Q1 2026 Financial Results with Revenue Decline

Quest Resource Holding Corporation (QRHC) reported its financial results for the first quarter of 2026, revealing a revenue of $61.7 million, a decrease of 9.8% from $68.4 million in the same period last year. The decline was attributed primarily to reduced waste volumes from certain industrial clients, which accounted for a revenue drop of approximately $4.0 million. Additionally, the company experienced a $3.0 million revenue decrease due to the divestiture of an underperforming business operation completed on March 31, 2025. Despite these challenges, QRHC noted a growth of about $2.0 million in business from new client acquisitions and expanded services to existing clients.

The company's cost of revenue also decreased, falling by 9.4% to $52.1 million, aligning with the revenue decline. Gross profit for the quarter was reported at $9.7 million, down from $10.9 million, resulting in a gross profit margin of 15.7%, slightly lower than the previous year's 16.0%. Operating expenses significantly decreased to $9.4 million from $19.1 million, primarily due to reduced selling, general, and administrative expenses, which dropped from $11.4 million to $8.4 million. This reduction was largely driven by labor cost savings from a reduced headcount and lower professional fees.

QRHC's net loss for the quarter was $2.3 million, a notable improvement compared to a net loss of $10.4 million in the first quarter of 2025. The loss per share was $(0.11), compared to $(0.50) in the prior year. The company also reported an Adjusted EBITDA of $1.8 million, reflecting a 15.2% increase from $1.6 million in the same quarter last year. This improvement was attributed to better working capital management and cost-saving initiatives.

In terms of strategic developments, QRHC entered into a Loan and Security Agreement with Texas Capital Bank in March 2026, establishing a $40 million asset-based revolving credit facility. This agreement replaced the previous PNC Loan Agreement, which was terminated, resulting in a loss on debt extinguishment of $488,000. The company also recorded an estimated exit fee liability of $2.0 million related to its amended Credit Agreement with Monroe Capital, which will be amortized over the remaining term of the agreement.

Looking ahead, QRHC anticipates that its existing cash reserves, combined with borrowing capacity and expected cash flow from operations, will be sufficient to fund its operations for the next 12 months. The company remains focused on addressing client attrition and capitalizing on new business opportunities while navigating the challenges posed by the current economic environment.