Quest Resource Holding Corporation Reports Second Quarter 2025 Financial Results
Generated $3.9 million in operating cash flow in the second quarter and reduced debt by $6.6 million year to date
Posted sequential improvements in gross profits and adjusted EBITDA
Roll out of Operational Excellence Initiatives is on track and continuing with a focus on cash generation, profitability, and process improvement
THE COLONY, Texas, Aug. 11, 2025 (GLOBE NEWSWIRE) -- Quest Resource Holding Corporation () (“Quest” or the “Company”), a national leader in environmental waste and recycling services, today announced financial results for the second quarter ended June 30, 2025.
Second Quarter 2025 Highlights
- Revenue was $59.5 million, an 18.6% decrease compared with the second quarter of 2024, and a 13.0% decrease sequentially from the first quarter of 2025.
- Gross profit was $11.0 million, an 18.4% decrease compared with the second quarter of 2024, and a 1.0% increase sequentially from the first quarter of 2025.
- Gross margin was 18.5% of revenue compared with 18.5% for the second quarter of 2024, and a 250 basis point improvement sequentially from the first quarter of 2025.
- GAAP net loss was $(2.0) million, compared with GAAP net loss of $(1.5) million during the second quarter of 2024, and a net loss of $(10.4) million during the first quarter of 2025.
- GAAP net loss per basic and diluted share attributable to common stockholders was $(0.09), compared with $(0.07) for the second quarter of 2024, and $(0.50) for the first quarter of 2025.
- Adjusted EBITDA was $2.7 million, compared with $5.1 million during the second quarter of 2024, and $1.6 million during the first quarter of 2025.
- Adjusted net loss per diluted share was $(0.04), compared with adjusted net income of $0.03 per diluted share during the second quarter of 2024, and $(0.14) per share during the first quarter of 2025.
Year-to-Date 2025 Highlights (June 30, 2025)
- Revenue was $128.0 million, a 12.2% decrease compared with the same period of 2024.
- Gross profit was $22.0 million, a 20.3% decrease compared with the same period of 2024.
- Gross margin was 17.2% of revenue compared with 18.9% during the same period of 2024.
- GAAP net loss was $(12.4) million, compared with GAAP net loss of $(2.2) million during the same period of 2024.
- GAAP net loss per basic and diluted share attributable to common stockholders was $(0.59), compared with $(0.11) during the same period of 2024.
- Recognized a non-cash loss on sale of assets of $4.5 million, or $(0.21) per basic and diluted share, related to the sale of the tenant-direct mall portion of RWS during the first quarter of 2025. Recognized a non-cash loss of $1.7 million, or $(0.08) per basic and diluted share, related to an impairment charge on intangible assets during the first quarter of 2025.
- Year-to-date Adjusted EBITDA was $4.2 million, a 58.7% decrease compared to $10.3 million during the same period of 2024.
- Adjusted net loss per diluted share was $(0.18), compared with adjusted net income of $0.10 per diluted share during the same period of 2024.
Recent Highlights
- Improved cash cycle times, generating $3.9 million of operating cash flow during the second quarter of 2025.
- Reduced debt by $6.6 million year-to-date.
- Secured significant competitive wins; a new client in the restaurant end market and a geographic expansion with an existing client in the retail end market.
“We experienced a host of issues last year. These include a number of operational issues, an industrial sector slowdown, and client attrition; as well as challenges related to adding a record number of new clients and systems integration. We took decisive, well-documented actions to address these issues. These include reductions and additions to the management team, making cost reductions, selling an underperforming business line, and resetting financial covenants with our lenders. Since then, we have launched an intensive set of initiatives focused on driving short-term improvements and long-term operating and financial performance.
Our efforts to fundamentally improve our operations and produce more consistent financial results are on track. Sequential revenue comparisons reflect the sale of the non-core portion of our RWS business at the end of the first quarter and continued softness with clients in the industrial end market. Sequential growth in gross profit dollars, a decrease in SG&A costs and strong operating cash flow generation were all a direct result of the performance-focused actions we took earlier this year. Despite continued softness in the industrial end market, we are on track to continue to deliver improvements in the trajectory of the business,” said Dan M. Friedberg, Chairman of the Company’s Board of Directors.
Perry W. Moss, Quest’s Chief Executive Officer, said, “I believe a culture of performance and accountability is critical to the success of an organization. We are fundamentally changing Quest’s culture, and we are already seeing positive results. Our team is embracing this data and KPI driven philosophy. Our Operational Excellence Initiatives are beginning to improve cash generation, improve efficiency, and reduce operational variability. In addition, we are strengthening vendor relationships and increasing employee satisfaction while maintaining high standards for client service; all of which will drive long-term shareholder value.
While we have been implementing operational improvements, we have also been actively pursuing growth initiatives. Macro uncertainties are causing prospective clients to delay decision making, which is slowing the pace of growth. Nevertheless, we are still winning new clients and adding new client opportunities to our pipeline. In addition, we are focused on expanding our share of wallet with existing clients. During the second quarter, our sales organization generated a significant win with a new client in the restaurant industry and a significant expansion of the geographic footprint with an existing retailer client. Both were competitive wins and reflective of our value proposition.”
Second Quarter 2025 Earnings Conference Call and Webcast
Quest will host a conference call on Monday, August 11, 2025, at 5:00 PM ET, to review the financial results for the second quarter ended June 30, 2025. To participate, dial 1-800-717-1738 or 1-646-307-1865. Investors can also access the call online through a listen-only webcast on the investor relations section of Quest’s website at . The webcast, which may include forward-looking information, will be archived on the Quest investor relations website for at least 90 days.
About Quest Resource Holding Corporation
Quest is a national provider of waste and recycling services that enables larger businesses to excel in achieving their environmental and sustainability goals and responsibilities. Quest delivers focused expertise across multiple industry sectors to build single-source, client-specific solutions that generate quantifiable business and sustainability results. Addressing a wide variety of waste streams and recyclables, Quest provides information and data that tracks and reports the environmental results of Quest’s services, gives actionable data to improve business operations, and enables Quest’s clients to excel in their business and sustainability responsibilities. For more information, visit .
Reconciliation of U.S. GAAP to Non-GAAP Financial Measures
In this press release, non-GAAP financial measures, “Adjusted EBITDA” and “Adjusted Net Income (Loss)” are presented. From time-to-time, Quest considers and uses these supplemental measures of operating performance in order to provide an improved understanding of underlying performance trends. Quest believes it is useful to review, as applicable, both (1) GAAP measures that include (i) depreciation and amortization, (ii) interest expense, (iii) stock-based compensation expense, (iv) income tax expense, and (v) certain other adjustments, and (2) non-GAAP measures that exclude such items. Quest presents these non-GAAP measures because it considers them an important supplemental measure of Quest’s performance. Quest’s definition of these adjusted financial measures may differ from similarly named measures used by others. Quest believes these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. These non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for the Company’s GAAP measures. (See attached tables “Reconciliation of Net Loss to Adjusted EBITDA” and “Adjusted Net Income (Loss) Per Share”).
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, which provides a “safe harbor” for such statements in certain circumstances. The forward-looking statements include, but are not limited to, our belief that our efforts to fundamentally improve our operations and produce more consistent financial results are on track, our belief that sequential growth in gross profit dollars, a decrease in SG&A costs and strong operating cash flow generation were all a direct result of the performance-focused actions we took earlier this year and our expectation that we are on track to continue to deliver improvements in the trajectory of the business. Actual events or results could differ materially from those discussed in the forward-looking statements as a result of various factors, including, but not limited to, competition in the environmental services industry, the impact of the current economic environment, interruptions to supply chains, commodity price fluctuations, and extended shut down of businesses, and other factors discussed in greater detail in our filings with the Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K for the year ended December 31, 2024. You are cautioned not to place undue reliance on such statements and to consult our SEC filings for additional risks and uncertainties that may apply to our business and the ownership of our securities. Our forward-looking statements are presented as of the date made, and we disclaim any duty to update such statements unless required by law to do so.
Investor Relations Contact:
Three Part Advisors, LLC
Joe Noyons
817.778.8424
Financial Tables Follow
| Quest Resource Holding Corporation and Subsidiaries STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share amounts) | |||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||
| Revenue | $ | 59,540 | $ | 73,145 | $ | 127,970 | $ | 145,796 | |||||||||||||||||||||
| Cost of revenue | 48,503 | 59,613 | 106,002 | 118,228 | |||||||||||||||||||||||||
| Gross profit | 11,037 | 13,532 | 21,968 | 27,568 | |||||||||||||||||||||||||
| Selling, general, and administrative | 9,295 | 9,385 | 20,707 | 19,184 | |||||||||||||||||||||||||
| Depreciation and amortization | 1,299 | 2,365 | 2,842 | 4,726 | |||||||||||||||||||||||||
| Loss on sale of assets | 61 | — | 4,491 | — | |||||||||||||||||||||||||
| Impairment loss | — | — | 1,707 | — | |||||||||||||||||||||||||
| Total operating expenses | 10,655 | 11,750 | 29,747 | 23,910 | |||||||||||||||||||||||||
| Operating income (loss) | 382 | 1,782 | (7,779 | ) | 3,658 | ||||||||||||||||||||||||
| Interest expense | (2,375 | ) | (2,612 | ) | (4,642 | ) | (5,084 | ) | |||||||||||||||||||||
| Loss before taxes | (1,993 | ) | (830 | ) | (12,421 | ) | (1,426 | ) | |||||||||||||||||||||
| Income tax expense (benefit) | (22 | ) | 684 | (44 | ) | 743 | |||||||||||||||||||||||
| Net loss | $ | (1,971 | ) | $ | (1,514 | ) | $ | (12,377 | ) | $ | (2,169 | ) | |||||||||||||||||
| Net loss per share applicable to common stockholders: | |||||||||||||||||||||||||||||
| Basic and diluted | $ | (0.09 | ) | $ | (0.07 | ) | $ | (0.59 | ) | $ | (0.11 | ) | |||||||||||||||||
| Weighted average number of common shares outstanding: | |||||||||||||||||||||||||||||
| Basic and diluted | 20,933 | 20,507 | 20,896 | 20,446 | |||||||||||||||||||||||||
| RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (Unaudited) (In thousands) | |||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||
| Net loss | $ | (1,971 | ) | $ | (1,514 | ) | $ | (12,377 | ) | $ | (2,169 | ) | |||||||||
| Depreciation and amortization | 1,500 | 2,605 | 3,246 | 5,101 | |||||||||||||||||
| Interest expense | 2,375 | 2,612 | 4,642 | 5,084 | |||||||||||||||||
| Stock-based compensation expense | 533 | 363 | 1,195 | 720 | |||||||||||||||||
| Acquisition, integration, and related costs | — | 19 | — | 61 | |||||||||||||||||
| Loss on sale of assets | 61 | — | 4,491 | — | |||||||||||||||||
| Impairment loss | — | — | 1,707 | — | |||||||||||||||||
| Other adjustments | 208 | 370 | 1,379 | 719 | |||||||||||||||||
| Income tax expense (benefit) | (22 | ) | 684 | (44 | ) | 743 | |||||||||||||||
| Adjusted EBITDA | $ | 2,684 | $ | 5,139 | $ | 4,239 | $ | 10,259 | |||||||||||||
| ADJUSTED NET INCOME (LOSS) PER SHARE (Unaudited) (In thousands, except per share amounts) | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||
| Reported net loss (1) | $ | (1,971 | ) | $ | (1,514 | ) | $ | (12,377 | ) | $ | (2,169 | ) | ||||||||
| Amortization of intangibles (2) | 1,104 | 2,221 | 2,468 | 4,441 | ||||||||||||||||
| Acquisition, integration, and related costs (3) | — | 19 | — | 61 | ||||||||||||||||
| Loss on sale of assets | 61 | — | 4,491 | — | ||||||||||||||||
| Impairment loss | — | — | 1,707 | — | ||||||||||||||||
| Adjusted net income (loss) | $ | (806 | ) | $ | 726 | $ | (3,711 | ) | $ | 2,333 | ||||||||||
| Diluted earnings (loss) per share: | ||||||||||||||||||||
| Reported net loss | $ | (0.09 | ) | $ | (0.07 | ) | $ | (0.59 | ) | $ | (0.11 | ) | ||||||||
| Adjusted net income (loss) | $ | (0.04 | ) | $ | 0.03 | $ | (0.18 | ) | $ | 0.10 | ||||||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||||||
| Basic | 20,933 | 20,507 | 20,896 | 20,446 | ||||||||||||||||
| Diluted (4) | 20,933 | 22,974 | 20,896 | 22,777 | ||||||||||||||||
(1) Applicable to common stockholders
(2) Reflects the elimination of non-cash amortization of acquisition-related intangible assets
(3) Reflects the add back of acquisition/integration related transaction costs
(4) Reflects adjustment for dilution when adjusted net income is positive
BALANCE SHEETS
(In thousands, except per share amounts)
| June 30, | December 31, | ||||||||
| 2025 | 2024 | ||||||||
| (Unaudited) | |||||||||
| ASSETS | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 449 | $ | 396 | |||||
| Accounts receivable, less allowance for doubtful accounts of $751 and $831 as of June 30, 2025 and December 31, 2024, respectively | 53,660 | 62,252 | |||||||
| Prepaid expenses and other current assets | 2,618 | 2,601 | |||||||
| Assets held for sale | — | 9,890 | |||||||
| Total current assets | 56,727 | 75,139 | |||||||
| Goodwill | 81,065 | 81,065 | |||||||
| Intangible assets, net | 9,316 | 12,946 | |||||||
| Property and equipment, net, and other assets | 5,954 | 6,495 | |||||||
| Total assets | $ | 153,062 | $ | 175,645 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||
| Current liabilities: | |||||||||
| Accounts payable and accrued liabilities | $ | 38,130 | $ | 39,899 | |||||
| Deferred revenue | 146 | 1,001 | |||||||
| Current portion of notes payable | 1,540 | 1,651 | |||||||
| Liabilities held for sale | — | 1,840 | |||||||
| Total current liabilities | 39,816 | 44,391 | |||||||
| Notes payable, net | 69,680 | 76,265 | |||||||
| Other long-term liabilities | 628 | 833 | |||||||
| Total liabilities | 110,124 | 121,489 | |||||||
| Commitments and contingencies | |||||||||
| Stockholders’ equity: | |||||||||
| Preferred stock, $0.001 par value, 10,000 shares authorized, no shares issued or outstanding as of June 30, 2025 and December 31, 2024 | — | — | |||||||
| Common stock, $0.001 par value, 200,000 shares authorized, 20,712 and 20,606 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively | 21 | 21 | |||||||
| Additional paid-in capital | 180,405 | 179,246 | |||||||
| Accumulated deficit | (137,488 | ) | (125,111 | ) | |||||
| Total stockholders’ equity | 42,938 | 54,156 | |||||||
| Total liabilities and stockholders’ equity | $ | 153,062 | $ | 175,645 | |||||
