Report
Nicholas Cortellucci, CFA

BQE: Another Huge Quarter Driven by Technical Services

What you need to know:
• BQE reported Q2 financial results yesterday that massively beat our estimates due to continued growth in the technical services segment.
• Q2 proportional revenue came in at $12.9M (+112% YoY), beating our estimate of $7.2M. Adjusted EBITDA was $2.5M (19% margin, +85% YoY) compared to our estimate of $2.2M (30% margin).
• BQE provided a strong outlook for H2/25, including continued strength and visibility from the technical services segment.

Yesterday after market close, BQE Water (BQE:TSXV, BTQNF:OTC) reported Q2
financials that once again largely beat our expected numbers due to strong performance from the technical services segment. Technical services revenue increased 10-fold YoY, while the other segments declined. BQE noted that it has advanced several projects in Canada, the U.S., and China into the commissioning stage, and it expects further strong results in H2. We are maintaining our BUY rating and $80.00/share target price on BQE Water.

Key Highlights
• Q2 proportional revenue came in at $12.9M (+112% YoY) vs. our estimate of $7.2M. This was comprised of $1.1M in operations services revenue (-55% YoY), $10.1M in technical services revenue (vs. $0.9M in Q2/24), and $1.6M in BQE’s share of JV revenue (-39% YoY).
• Operations services declined as BQE was not operating at the Minto Mine in 2025 and it reduced the scope of services on its Southwestern U.S. client.
• Gross margin was 33% vs. our estimate of 47% and 47% in Q2/24, due to the lower margin technical services revenue making up a much larger portion of total revenue.
• Adjusted EBITDA for the quarter was $2.5M (+85% YoY) vs. our estimate of $2.2M. This represents a 19% margin compared to 22% in Q2/24.
• BQE’s share of JV net income was $0.4M, compared to $1.1M in Q2/24.
• Net income was $1.9M or $1.48/share vs. our estimate of $1.6M or $1.21/share and $0.6M or $0.44/share in Q2 last year.
• The Company ended the quarter with $13.9M in cash after generating $2.7M in OCF. BQE ended the quarter with $2.4M in debt (leases and non-interest-bearing debt).
Underlying
BQE WATER INC.

BQE Water is engaged in the acquisition and development of processes to treat metal-laden, sulphate-rich waste water streams for acid neutralization and metal recovery. The principal operations of Co. are to build process plants and earn revenues from recovered metals, treatment fees, plant sales and process licenses.

Provider
Atrium Research Corporation
Atrium Research Corporation

Atrium Research provides institutional quality issuer paid research on North American public equities using deep fundamental analysis. Our research reports are disseminated through Bloomberg, FactSet, Capital IQ, Reuters and many more, as well as through our social media and email distribution lists. 

Analysts
Nicholas Cortellucci, CFA

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