Operational Excellence Drives Sequential EBITDA Growth Despite Top-Line Weakness
Quest Resource Holding Corporation (Nasdaq: QRHC) (“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 http://investors.qrhc.com/. The webcast, which may include forward-looking information, will be archived on the Quest investor relations website for at least 90 days.