LiqTech International (LIQT) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue declined 51% year-over-year to $2.48 million due to a $1.5M oil & gas project delay, now expected in H1 2025, shifting revenue recognition and impacting performance.

• Net loss widened to $2.8 million from $1.4 million in Q3 2023, with negative gross margin and ongoing market uncertainty.

• Multiple pilot units are active in oil & gas, petrochemical, lithium brine, and marine sectors, with promising results and future commercial potential.

• A joint venture with JITRI in China was established to expand presence in the marine water treatment market, targeting shipbuilding and EGR system opportunities.

• Internal sales team changes and new distribution partnerships are underway to address underperformance in the swimming pool segment.

Financial highlights

• Q3 2024 revenue was $2.5 million, down from $5.1 million in Q3 2023, mainly due to the delayed oil & gas project and lower pool system deliveries.

• Gross margin turned negative at -$0.2 million (or -8.5%), compared to +$0.9 million (18.7%) YoY, reflecting fixed cost absorption issues on lower revenue.

• Net loss widened to $2.8 million from $1.4 million in Q3 2023.

• Operating expenses reduced to $2.4 million (from $2.6 million YoY), mainly via headcount and travel cost reductions.

• Ended the quarter with $4.5 million in cash, boosted to $13.3 million pro forma after a private placement.

Outlook and guidance

• Q4 2024 revenue expected between $3.3 million and $4.3 million (vs. $3.9 million in Q4 2023); full-year 2024 guidance is $14.5 million–$15.5 million.

• Cost reduction plan aims to lower adjusted EBITDA break-even to a $5.5 million quarterly revenue run rate.

• Management highlights ongoing macroeconomic uncertainty, reduced order intake, and the need to accelerate growth and restore profitability.