Sky Quarry Inc. Reports $12.2 Million Net Loss and 47% Revenue Decline in 2025

Sky Quarry Inc. has reported significant financial challenges in its latest 10-K filing for the fiscal year ending December 31, 2025. The company recorded a net loss of $12.2 million, a slight improvement from the $14.7 million loss reported in the previous year. Total revenues fell by 47% to $12.5 million, down from $23.4 million in 2024, primarily due to refinery shutdowns for repairs and a decrease in crude oil prices, which negatively impacted the pricing of their refined products.

The company's cost of goods sold also decreased, amounting to $15.6 million, down from $24.8 million in 2024. However, the gross loss increased to $3.1 million, reflecting a gross margin of -24.8%. Operating expenses remained relatively stable, totaling $6.1 million, which accounted for 49.2% of net sales. The company continues to face challenges in managing its operational costs, particularly in light of fixed overhead expenses that did not decrease proportionately with revenues.

In terms of strategic developments, Sky Quarry has been focusing on its Eagle Springs Refinery and the PR Spring facility, which is in the process of being retrofitted to utilize the company's proprietary ECOSolv technology for recycling waste asphalt shingles. The company aims to complete this retrofit within the next twelve months, contingent on securing the necessary funding, which is estimated to be between $3.5 million and $4 million. The company has also engaged in a Controlled Equity Offering with Cantor Fitzgerald, allowing it to raise up to $4.7 million through the sale of common stock.

Operationally, Sky Quarry has faced significant challenges, including a reduction in production volumes and customer concentration risks, with three customers accounting for approximately 88% of total net sales in 2025. The company has also reported a past due debt of approximately $7.6 million, raising concerns about its ability to continue as a going concern. The management has indicated that it is actively seeking to improve its financial position through increased crude oil purchases and operational efficiencies.

Looking ahead, Sky Quarry's management remains cautiously optimistic about future revenue growth, driven by anticipated increases in production capacity and improved operational efficiencies. However, the company acknowledges the ongoing risks associated with market conditions, customer relationships, and the need for additional capital to support its operations and growth initiatives. The outlook remains uncertain, with management emphasizing the importance of securing funding and managing operational costs effectively to navigate the challenges ahead.