Arq (ARQ) investor relations material

Executive summary

• Q1 2026 revenue grew 7% year-over-year to $29.1 million, driven by strong PAC business performance and higher sales volumes, despite lower pricing from product mix and elevated natural gas prices.

• Net loss was $0.8 million for Q1 2026 versus net income of $0.2 million in Q1 2025, mainly due to non-cash inventory revaluation, GAC production carry-over costs, and higher SG&A expenses.

• Adjusted EBITDA was $2.7 million, down from $4.1 million in Q1 2025, reflecting lower net income and inventory revaluation.

• Board and management increased ownership to over 20% through share purchases, aligning interests with shareholders.

• Biennial plant turnaround at Red River completed under budget, supporting CapEx guidance and operational reliability.

Financial highlights

• Revenue: $29.1 million in Q1 2026, up from $27.2 million year-over-year, primarily due to increased PAC sales.

• Gross margin: 34% in Q1 2026 (34.2% in some reports), down from 36%–36.4% prior year, impacted by inventory revaluation and GAC costs.

• Net loss: $0.8 million ($0.02 per share) in Q1 2026 vs. net income of $0.2 million in Q1 2025.

• Adjusted EBITDA: $2.7 million in Q1 2026, down from $4.1 million in Q1 2025.

• Cash and restricted cash: $15.9 million as of March 31, 2026.

Outlook and guidance

• Full-year 2026 revenue guidance reiterated at $120–$125 million, with adjusted EBITDA of $17–$20 million, assuming no GAC contribution.

• PAC volumes expected between 122–125 million pounds at $0.88–$0.91 per pound, with 96% contract visibility.

• GAC optimization review ongoing, with a go-forward strategy expected by Q3 2026 and no GAC production expected in 2026.

• PAC business expected to remain cash generative through 2026 and beyond.

• Liquidity is expected to be sufficient for the next 12 months, supported by cash on hand and borrowing availability.