Quest Resource Holding Corporation Reports Q1 2025 Financial Results with Revenue Decline and Significant Net Loss

Quest Resource Holding Corporation reported its financial results for the first quarter of 2025, revealing a revenue of $68.4 million, a decrease of 5.8% from $72.7 million in the same period last year. The company experienced a significant net loss of $10.4 million, compared to a loss of $655,000 in the first quarter of 2024. This decline in revenue was attributed to lost customers, particularly from the divested mall-related business, which accounted for approximately $7 million of the revenue drop. However, new client acquisitions contributed an increase of about $11 million in revenue.

The company's cost of revenue decreased slightly to $57.5 million from $58.6 million year-over-year, but the gross profit fell to $10.9 million, resulting in a gross profit margin of 16.0%, down from 19.3% in the prior year. The decline in gross profit margin was influenced by onboarding costs associated with new customers and lower revenue volumes. Operating expenses surged to $19.1 million, up from $12.2 million, primarily due to increased selling, general, and administrative expenses, which included $700,000 in severance and retirement costs.

In a strategic move, Quest completed the sale of substantially all assets related to its mall business on March 31, 2025, for approximately $5 million in cash, with potential additional payments based on future performance. This transaction resulted in a $4.4 million loss on the sale of assets and a $1.7 million impairment charge related to customer relationship intangible assets. The company also reported a decrease in total assets to $165.7 million from $175.6 million at the end of 2024, with total liabilities remaining relatively stable at $121.3 million.

As of March 31, 2025, Quest had 20,636,557 shares of common stock outstanding and reported working capital of $21.6 million, including $1.4 million in cash and cash equivalents. The company anticipates that its existing cash, borrowing capacity, and expected cash generation from operations will be sufficient to fund its operations for the next 12 months. Looking ahead, Quest aims to improve its financial performance by focusing on operational efficiencies and cost-saving measures, particularly following recent headcount reductions aimed at enhancing operational efficiency.