Quest Resource reports Q3 EPS (6c), consensus (1c)

Reports Q3 revenue $72.8M, consensus $77.09M.”We were very active during the third quarter: securing significant new client wins, onboarding a record number of new clients, and expanding engagements with existing ones. New client onboarding, combined with strong demand from existing clients, added approximately $16 million in revenue during the third quarter. However, growth was partially offset by weaker-than-expected conditions at certain clients in our industrial end markets and isolated client attrition. In addition, during the third quarter, we implemented our vendor management system, which temporarily caused a significantly higher than expected increase in cost of revenue and incremental SG&A in support of the transition,” said S. Ray Hatch, President and Chief Executive Officer of Quest. “As a result of the hard work of our team, we have received high marks from new clients, several of which have already been reference clients, helping us to continue to grow our pipeline of new business. In addition, we have made significant progress and are in the final stages of selecting lenders to refinance our debt. Based on initial proposals, the refinancing is on track to be completed by the end of the year, and we expect both a significant reduction in interest expense and improved terms. Based on the continued ramp of new business and increasing efficiencies, we expect to show year-over-year increases in revenue and profitability during the fourth quarter. During 2025 and beyond, we expect to continue to drive significant growth from new clients and improve profitability from efficiency gains and earnings leverage.”