Fuel Tech Inc ((FTEK)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Fuel Tech Inc.’s recent earnings call painted a generally positive picture for the company, highlighted by significant growth in the FUEL CHEM segment and a robust financial standing. Despite these positive aspects, challenges persist in the APC segment, which saw a decline in revenue, and the company reported a net loss for the quarter.
Record First Quarter for FUEL CHEM Segment
The FUEL CHEM business segment achieved its best first quarter performance in over a decade, with revenues soaring by 92% compared to the same period last year. This remarkable growth underscores the segment’s pivotal role in driving the company’s overall performance.
Significant Revenue Growth
Fuel Tech reported a 29% increase in revenues for the first quarter of 2025 compared to the prior year, largely driven by the robust performance of the FUEL CHEM segment. This growth is a testament to the company’s strategic focus and operational efficiency.
Increased Gross Margins and Reduced Operating Loss
The company saw an expansion in gross margins, which rose to 46% of revenues from 41% in the previous year’s first quarter. Additionally, the operating loss was significantly narrowed, indicating improved cost management and operational effectiveness.
Strong Financial Position
Fuel Tech maintained a strong financial position, ending the quarter with approximately $31 million in cash, cash equivalents, and investments, and no long-term debt. This financial stability provides a solid foundation for future growth initiatives.
Increase in APC Project Backlog
The APC project backlog reached its highest level in three years, with a 66% increase from December 31st, 2024. This increase reflects the company’s successful efforts in securing new projects and enhancing its pipeline.
DGI Technology Progress
Fuel Tech is advancing its Dissolved Gas Infusion (DGI) technology, with a product demonstration set to commence and ongoing discussions with potential customers across various end markets. This progress highlights the company’s commitment to innovation and market expansion.
Decline in APC Segment Revenue
The APC segment experienced a revenue decline to $1.3 million from $2.3 million in the previous year’s first quarter. This decrease was primarily due to the timing of project execution on existing contracts, posing a challenge for the segment.
Net Loss Reported
Despite the positive developments, Fuel Tech reported a net loss of $739,000 or $0.02 per share for the quarter, compared to a net income of $281,000 or $0.01 per share in the same period last year. This net loss highlights the challenges the company faces in achieving profitability.
Forward-Looking Guidance
Fuel Tech provided an optimistic outlook for the future, with expectations of continued strong performance and growth. The company anticipates total revenues to approximate $30 million for the full year 2025, with both business segments expected to surpass 2024 performance levels. The APC project backlog is expected to close an additional $3 to $5 million in new contract awards by the end of the second quarter.
In conclusion, Fuel Tech’s earnings call highlighted a generally positive sentiment, driven by exceptional growth in the FUEL CHEM segment and a strong financial position. However, challenges remain, particularly in the APC segment, which saw a decline in revenue and contributed to the net loss reported for the quarter. Looking ahead, the company remains optimistic about its growth prospects and financial performance.