Quest Resource Holding Corporation — Second Quarter 2026 Earnings Summary

Financial Performance

• Revenue was $64.1 million, a 7.6% increase compared to the second quarter of 2025 and a 3.8% increase from the first quarter of 2026.
• Gross profit was $10.4 million, a 5.5% decrease compared to the second quarter of 2025, but a 7.9% increase from the first quarter of 2026.
• Gross margin was 16.3% of revenue, down from 18.5% in the second quarter of 2025 and up from 15.7% in the first quarter of 2026.
• GAAP net loss was $(12.2) million, including a non-cash goodwill impairment loss of $(11.0) million, compared to a net loss of $(2.0) million in the second quarter of 2025.
• GAAP net loss per basic and diluted share was $(0.57), compared to $(0.09) in the second quarter of 2025.
• Adjusted EBITDA was $2.8 million, an increase from $2.7 million in the second quarter of 2025 and $1.8 million in the first quarter of 2026.
• Operating cash flow was $4.5 million for the second quarter.
• SG&A expenses decreased 11% compared to the prior year period.
• Total liabilities increased to $107.5 million as of June 30, 2026, from $105.0 million as of December 31, 2025.
• Notes payable, net, decreased to $59.4 million as of June 30, 2026, from $64.0 million as of December 31, 2025.
• Goodwill decreased to $70.1 million as of June 30, 2026, from $81.1 million as of December 31, 2025, reflecting the impairment.

Guidance and Future Outlook

• Management expects to deliver improved financial results as operating conditions normalize.
• The sales pipeline remains healthy.
• The operating landscape is expected to gradually improve.
• The company remains focused on executing Operational Excellence initiatives to drive productivity enhancements.

Business Segments and Product Lines

• The second quarter was driven by contributions from new customer wins and wallet share expansions onboarded during the second half of 2025 and the first quarter of 2026.
• The company secured four new share-of-wallet wins, including a significant win with a large national automotive parts retailer.
• A large franchisee customer in the quick-service restaurant industry was launched in May with minimal start-up costs.
• Productivity initiatives and cost optimization drove the reduction in SG&A and strong operating cash flow.

Market and Competitive Landscape

• The environmental services industry faces competition, as noted in the Safe Harbor statement.
• The company serves larger businesses across multiple industry sectors to help achieve environmental and sustainability goals.

Risks and Challenges

• Forward-looking statements are subject to risks including competition in the environmental services industry.
• Risks include the impact of the current economic environment, interruptions to supply chains, commodity price fluctuations, and extended shutdowns of businesses.
• The company recorded a significant non-cash goodwill impairment loss of $11.0 million.

Management Commentary and Tone

• CEO Perry W. Moss stated the company returned to top-line and Adjusted EBITDA growth, supported by recent customer wins, stabilizing volumes from Industrial customers, and ongoing efficiencies.
• CFO Brett Johnston noted that recent customer wins delivered meaningful margin contributions as one-time start-up costs subsided, and that gross profit gains achieved 100% flow-through to Adjusted EBITDA due to SG&A reduction.
• Management emphasized a financial focus on cost optimization, debt reduction, and ongoing improvement of the cash cycle.

Other Key Points

• The company voluntarily reduced term debt by $2.0 million in the second quarter, bringing year-to-date voluntary debt reduction to $4.0 million.
• The debt reduction was facilitated by strong operating cash flow and progress on working capital initiatives.
• A conference call and webcast were held on August 6, 2026, to review the results.
• The company is a national provider of waste and recycling services.