LiqTech International (LIQT) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue declined 10.1% year-over-year to $4.49 million, with a net loss of $2.1 million, driven by lower sales and unfavorable product mix; gross margin fell to 16% from 23.3% last year.

• Secured new pilot orders from major U.S. energy companies for produced water treatment, marking the third consecutive quarter of such orders in oil and gas.

• Expanded distribution partnerships in oil & gas, commercial pools, phosphoric acid, and marine scrubber markets, including new agreements in China, Greece, and South Korea.

• Achieved NSF certification for U.S. commercial pool systems, enabling entry into the U.S. market.

• Management remains optimistic about growth in energy, marine, and pool segments, supported by new partnerships and certifications.

Financial highlights

• Q2 2024 revenue was $4.5 million, down 10% year-over-year, with system sales at $1.3 million and DPF sales at $1.6 million, both showing year-over-year growth.

• Gross profit was $0.7 million (16% margin), down from $1.2 million (23.3%) last year, mainly due to revenue mix and strategic pilot deliveries.

• Net loss was $2.1 million, compared to $1.6 million in Q2 2023, with a net loss margin of 47%.

• Cash and restricted cash at June 30, 2024 was $5.5 million, down from $10.4 million at year-end 2023.

• Operating expenses were $2.8 million, nearly flat year-over-year.

Outlook and guidance

• Q3 2024 revenue expected between $4.0 million and $5.0 million, similar to Q2; Q4 anticipated to be significantly higher if key opportunities materialize.

• Management expresses substantial doubt about the company's ability to continue as a going concern due to ongoing losses and cash burn.

• Break-even on Adjusted EBITDA basis targeted at $7 million quarterly revenue, potentially lower with favorable mix.