10-Q · May 6, 2026
Arq, Inc. reported Q1 2026 revenue of $29.05 million, a 7% increase from $27.25 million in Q1 2025, with a net loss of $0.84 million compared to a net income of $0.20 million in the prior year. The company has paused…
Earnings analysis · 10-Q
ARQ earnings analysis
Filed August 10, 2026 · Our reading of the company's report
The latest report
Arq delivered improved second-quarter results, with revenue up 5%, gross margin expanding approximately 520 basis points, operating loss nearly breakeven at $68,000, and EPS improving to negative $0.02. Cash burn also…
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Arq delivered improved second-quarter results, with revenue up 5%, gross margin expanding approximately 520 basis points, operating loss nearly breakeven at $68,000, and EPS improving to negative $0.02. Cash burn also improved, but unrestricted cash was only $906,000 and debt increased to $30.704 million. The key strategic setback is the suspension of GAC production, with no production expected in 2026 or 2027 while the company evaluates economics and required design modifications.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-0.02
What stood out
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Revenue grew 5% on pricing and AC volumes
Second-quarter revenue increased 5% year over year to $29.883 million from $28.584 million. Management attributed the increase to $1.3 million of pricing benefit and approximately $1.0 million from higher AC volumes.
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Gross margin expanded approximately 520 bps
Gross margin, calculated from revenue less cost of revenue, increased to approximately 38.5% from 33.3% year over year, as cost of revenue declined 4% to $18.372 million from $19.066 million. The company cited the Corbin Facility idling and improved product mix as favorable factors.
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Operating loss and EPS improved materially
Operating loss narrowed to $68,000 from $1.791 million, improving operating margin to approximately negative 0.2% from negative 6.3%. Net loss improved to $733,000, or $0.02 per share, from $2.369 million, or $0.06 per share.
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Cash burn improved year over year
Six-month operating cash flow used improved to $2.659 million from $5.276 million used in the prior-year period, a $2.617 million improvement. Investing cash use also declined to $2.023 million from $5.530 million, primarily because prior-year GAC construction spending was higher.
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First-half demand remained positive
Six-month revenue increased 6% to $58.936 million from $55.831 million, driven by approximately $2.3 million of volume growth and $0.6 million of pricing. Management cited higher demand from industrial, municipal water and power-generation customers.
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Management sees further margin opportunity
Management expects gross margin to continue improving as fixed GAC production costs lessen and PAC production efficiency and product mix improve. Adjusted EBITDA increased to $5.842 million from $3.668 million in the second quarter.
What to watch
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GAC production remains suspended
Management does not expect GAC production in fiscal years 2026 or 2027. Independent testing indicated the thermal oxidizer supported only approximately 15 million pounds of annual GAC production versus original design capacity of 25 million pounds or higher, and the optimization review remains ongoing.
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Low unrestricted cash and higher debt
Liquidity remains constrained: unrestricted cash was only $906,000 at June 30, 2026, while restricted cash was $11.236 million. Total debt obligations increased to $30.704 million from $28.465 million at December 31, 2025, including $21.410 million outstanding on the revolving facility.
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Receivables and inventory increased
Working capital absorbed cash during the first half, including a $5.050 million increase in receivables and a $2.690 million increase in inventories. Receivables rose to $20.030 million and inventories to $19.407 million from $14.980 million and $15.895 million, respectively, at December 31, 2025.
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Overhead and depreciation remain elevated
Second-quarter SG&A increased 15% to $6.789 million, including approximately $600,000 of additional payroll and benefits primarily from executive severance. Six-month SG&A increased 18% to $14.158 million, while depreciation and amortization increased 25% to $6.407 million.
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GAC design litigation remains ongoing
The company continues to face litigation with the GAC Facility design firm, alleging material cost increases and delays; the design firm filed a counterclaim on April 11, 2025. The filing states that litigation remains ongoing, but no loss provision has been quantified.
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No formal risk-factor changes; collateral tied up
The filing states that there were no material updates to the risk factors disclosed in the 2025 Form 10-K. However, the company had $11.2 million of outstanding regulatory surety bonds and held $9.3 million of restricted cash as collateral at June 30, 2026.
Management's outlook
No numeric revenue or EPS guidance was provided. Management expects cash on hand and borrowing availability as of June 30, 2026 to fund operations for the next 12 months, expects remaining-2026 capital expenditures to primarily relate to plant maintenance and improvements, and does not expect GAC production in fiscal years 2026 or 2027.
Earlier filings 4
10-K · March 10, 2026
Arq reported 2025 revenue of $120.336M (up from $108.959M in 2024) but posted a GAAP net loss of $52.61M (EPS -$1.27) driven largely by a $44.756M impairment related to its Corbin asset group. The company paused GAC…
10-Q · August 11, 2025
Arq reported Q2 revenue of $28,584,000, up from $25,405,000 a year earlier (+$3,179,000, ~12.5%), while GAAP loss per share narrowed to $(0.05) from $(0.06). Gross margin improved to ~33.3% and operating loss was…
10-Q · May 7, 2025
Arq reported Q1 revenue of $27,247 (in thousands), up from $21,740 in Q1 2024, and produced operating income of $662 (in thousands) versus an operating loss of $(2,980) in the prior year quarter. Net income was $203 (in…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.