BQE Water (BQE) Q3 2024 earnings summary

Executive summary

• Achieved record Proportional Revenue of $19.7M, net income of $3.8M, and Adjusted EBITDA of $5.8M for the first nine months of 2024, driven by strong recurring revenues and operational performance.

• Recurring revenues accounted for 77% of year-to-date Proportional Revenues, up from 56% in the same period of 2023, reflecting strategic focus on operations revenue.

• All North American and Chinese water treatment plants were operational in Q3 2024, with technical services activity rebounding as larger projects commenced.

Financial highlights

• Q3 2024 Proportional Revenue was $10.2M (up from $8.0M in Q3 2023); GAAP revenue was $6.8M (up from $6.2M).

• Gross margin increased 18% to $3.9M in Q3 2024; net income rose 75% to $3.7M; Adjusted EBITDA grew 67% to $4.6M.

• Net cash and cash equivalents were $11.0M at September 30, 2024, up from $7.9M at December 31, 2023; working capital increased to $12.4M.

• Share of income from joint ventures in Q3 2024 was $1.6M, up from $0.4M in Q3 2023.

• Net earnings per share (basic) for Q3 2024 was $2.91, up from $1.71 in Q3 2023.

Outlook and guidance

• Positive outlook for Q4 2024 and into Q1 2025, with technical services momentum expected to continue.

• Anticipates a lower ratio of recurring operations revenue to technical services revenue in Q4 due to revenue mix and seasonally lower metals production.

• Long-term growth drivers and risks remain unchanged; regulatory changes in the US not expected to materially impact business.