Fuel Tech — Q3 2026 Earnings Summary

Financial Performance:

• Consolidated revenues for Q3 2026 rose 16% year-over-year to $8.7 million from $7.5 million.
• APC segment revenues increased 38% year-over-year, while FUEL CHEM segment revenues rose 3%.
• Consolidated gross margin declined to 45% of revenues in Q3 2026 from 49% in the prior year period.
• APC gross margin decreased to 40% from 47% due to changes in project and product mix; FUEL CHEM gross margin was 49% compared to 50%.
• SG&A expenses were $3.7 million (42% of revenues) in Q3 2026, up from $3.2 million (43% of revenues) in the prior year, driven by higher employee costs, professional fees, and a non-recurring $175,000 CEO transition expense.
• Interest income was $247,000 in Q3 2026, down from $311,000 in the prior year.
• The company reported a net loss of $267,000 ($0.01 per share) for Q3 2026, compared to net income of $303,000 ($0.01 per share) in the prior year.
• Adjusted EBITDA loss was $249,000 in Q3 2026, compared to an Adjusted EBITDA of $228,000 in the prior year.
• As of September 30, 2026, cash and cash equivalents were $6.8 million, short-term investments were $11.0 million, and long-term investments totaled $10.0 million.
• Stockholders' equity was $37.2 million ($1.19 per share) as of September 30, 2026; the company reported no debt.
• APC segment backlog was $16.6 million as of September 30, 2026, up from $14.3 million at June 30, 2026 and $7.0 million at December 31, 2025; this figure excludes recently awarded APC contracts valued at $3.3 million.
• For the nine months ended September 30, 2026, consolidated revenues were $21.2 million compared to $19.4 million in the prior year period.
• Net loss for the nine months ended September 30, 2026 was $2.9 million ($0.09 per share), compared to a net loss of $1.1 million ($0.04 per share) in the prior year period.

Guidance and Future Outlook:

• Management outlined a framework for sustainable growth and value creation, focusing on converting strengths into above-market growth.
• Strategic priorities include deepening presence in core markets and pursuing power infrastructure opportunities related to data center and AI infrastructure construction, as well as water and wastewater treatment.
• The company intends to pursue organic growth initiatives and select M&A through a holistic, bottom-up strategy to strengthen product portfolios and expand channel presence.
• Management noted that the implementation of these strategic priorities is an active, ongoing process that will take time to fully realize.

Business Segments and Product Lines:

• The Air Pollution Control (APC) segment drove revenue growth, attributed to a significantly higher backlog in 2026 and progress on existing contracts.
• The FUEL CHEM segment revenues rose 3% year-over-year.
• The company develops proprietary technologies for air pollution control, process optimization, water treatment, and advanced engineering services.
• Key technologies include TIFI® Targeted In-Furnace Injection™ for fireside treatment on boilers and DGI® Dissolved Gas Infusion Systems for water and wastewater applications.
• Solutions have been installed on over 2,100 utility, industrial, and municipal units worldwide.

Market and Competitive Landscape:

• Management cited demand for services and progress in converting opportunities into new awards as drivers for higher sales and backlog growth.
• The company highlighted the relevance of its technology portfolio to customers' evolving environmental and operational priorities.
• The company serves utility and industrial applications globally, with a focus on burgeoning power infrastructure opportunities.

Risks and Challenges:

• Forward-looking statements are subject to risks and uncertainties detailed in the company's Form 10-K and subsequent filings, which could cause actual results to differ materially from expectations.
• Specific risks include those related to growth, results of operations, financial condition, cash flows, and business prospects.
• Gross margin pressure was noted in the APC segment due to changes in project and product mix.
• The company faces the challenge of implementing a multi-year strategic plan to align resources and drive consistent financial performance.

Management Commentary and Tone:

• Ramesh Nuggihalli, President and CEO, stated that higher sales and continued backlog growth reflect demand and progress in converting opportunities.
• Management expressed confidence in the quality of people, the breadth of the technology portfolio, global reach, and attractive markets.
• The tone is forward-looking and strategic, emphasizing the intent to drive long-term growth and sustainable value for shareholders.
• Management acknowledged the CEO transition expense as a non-recurring cost impacting SG&A.

Other Key Points:

• A conference call regarding the results and business activities is scheduled for November 4, 2026, at 10:00 am ET.
• The company has no debt as of September 30, 2026.
• The APC backlog of $16.6 million excludes recently awarded contracts valued at $3.3 million.
• The company utilizes Computational Fluid Dynamics modeling and high-end visualization software for its products and services.
• The press release includes a reconciliation of GAAP net loss to EBITDA and Adjusted EBITDA.