Perma-fix Reports Mixed Q2 Earnings Call

Perma-fix Environmental Services ((PESI)) has held its Q2 earnings call. Read on for the main highlights of the call.

The recent earnings call for Perma-fix Environmental Services presented a mixed sentiment, balancing positive developments with notable challenges. The company reported significant growth in its Treatment segment and international expansion, alongside new contract awards. However, these positive strides were tempered by production challenges, a delay in a key project start-up, and decreased revenue in the Services segment. Additionally, increased SG&A costs impacted the company’s financial performance.

Significant Revenue Growth in Treatment Segment

The Treatment segment of Perma-fix Environmental Services experienced a remarkable revenue increase of approximately 37% compared to the same period last year. Waste receipts more than doubled, reaching approximately $14 million in Q2 of 2025, showcasing the segment’s robust performance.

Improvement in Gross Margin

The company reported a significant improvement in gross margin, with a gross profit of $1.5 million for the quarter, compared to a negative $1.3 million in Q2 of 2024. This turnaround highlights the company’s efforts to enhance profitability.

RADMAC III IDIQ Contract Award

Perma-fix secured a position on the Navy’s $240 million RADMAC III IDIQ contract, bolstering its core competencies in radiological cleanup. This contract award is expected to open new opportunities for the company.

International Expansion and Contracts

The company received over $7 million in waste receipts from international customers in the past two quarters. Additionally, the EUR 50 million contract with the EU in Italy is progressing as planned, indicating successful international expansion.

Strong Waste Backlog

Perma-fix’s company-wide waste backlog stands at approximately $13.2 million, providing strong visibility into the second half treatment volumes and services activities, ensuring a steady stream of future work.

Challenges in Production Capacity

Technical challenges limited production capacity early in the quarter. However, these issues have been resolved through automation and process improvements, setting the stage for improved efficiency.

Delay in DFLAW Facility Start-up

The Department of Energy announced a delay in the DFLAW facility start-up from August 1 to as late as October 15, affecting potential revenue streams and causing some uncertainty.

Decrease in Services Segment Revenue

Revenue in the Services segment decreased by $2.5 million due to project delays and the completion of large projects in the prior year, highlighting challenges in maintaining consistent revenue streams.

Increased SG&A Costs

SG&A costs for the quarter rose to $4.1 million from $3.5 million in the prior year, attributed to higher business development expenses and the addition of a COO, impacting the company’s overall financial performance.

Forward-Looking Guidance

Looking ahead, Perma-fix Environmental Services anticipates continued revenue growth, driven by a 37% increase in the Treatment segment. Despite early technical challenges, improvements in automation and process enhancements are expected to benefit the second half of the year. The company remains optimistic about its position on the Navy’s $240 million RADMAC III IDIQ contract and international contracts, providing strong visibility into future activities.

In summary, the earnings call for Perma-fix Environmental Services reflected a cautiously optimistic outlook, with significant growth in the Treatment segment and promising international contracts. However, challenges such as production capacity issues and increased SG&A costs present hurdles that the company must navigate. Overall, the company’s strategic initiatives and contract awards position it well for future growth.