Q2 2026 Fuel Tech Inc Earnings Call Transcript
Key Points
- Consolidated revenues rose 17% to $6.5 million, with both APC and Fuel Chem segments delivering double-digit growth of 11% and 21%, respectively.
- APC backlog reached $14.3 million at June 30, 2026, the largest quarter-end backlog since 2018, and has since grown to approximately $17 million with new awards.
- The company maintains a strong financial position with $29.6 million in cash and investments and no debt, providing ample funding for growth initiatives.
- Fuel Chem segment is benefiting from high dispatch, with a potential commercial conversion of a demonstration program that could add $2.5 million to $3 million in annualized revenue in 2027.
- DGI technology is progressing toward commercialization, with a successful hatchery demo leading to a proposal for a full system and a wastewater trial generating rental revenue and reducing odor complaints.
- The company is optimistic about 2026, expecting revenues to exceed 2025 levels, with a strong pipeline of data center opportunities valued at $75 million to $100 million.
- Consolidated gross margin declined to 41% from 46% in the prior year, due to lower margins in both APC and Fuel Chem segments.
- APC segment gross margin decreased to 36% from 44%, reflecting project mix, contract timing, and execution costs.
- Net loss widened to $1.2 million from $689,000 in the prior year period, with adjusted EBITDA loss also increasing.
- A Fuel Chem demonstration program was halted due to a customer operational issue, delaying potential revenue until a mid-Q4 restart.
- The timing of data center contract awards remains uncertain, with one opportunity delayed and another not developing, potentially pushing material revenues to 2027 or later.
- CEO Vince Arnone is retiring, which could introduce leadership transition risks despite the appointment of a successor.
Greetings.
Welcome to the FuelTech Inc. 2026 Second Quarter Financial Results Conference Call and Webcast. At this time, all participants are in a listen-only mode.
( Operators Instructions )
Thank you, Devin. You may begin.
Please stand by.
Ladies and gentlemen, we are having a technical problem with the line of Kevin Sullivan. Please stand by for reconnection.
Thank you for standing by. I will now turn the conference over to Devin Sullivan.
( Operators Instructions )
Now we'll turn the call over to Devin Sullivan. Please go ahead.
Thank you, Jasmina, and good morning, everyone.
Thank you for joining us today for FuelTech's 2026 second quarter financial results conference call. Yesterday, after the close, we issued a press release, a copy of which is available at the company's website,
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