Fuel Tech 2025 Q2 Earnings Wider Losses Amid Revenue Decline

Fuel Tech (NASDAQ: FTEK) reported mixed second-quarter results, with a revenue decline and expanded losses despite improved gross margins. The company's Q2 revenue fell 21.1% year-over-year to $5.56 million, and the net loss widened to $689,000, or $0.02 per share, from $421,000, or $0.01 per share, in the prior year period. The company did not raise or lower its full-year guidance.

Revenue
Fuel Tech’s Q2 2025 revenue declined year-over-year due to timing issues in project execution within its Air Pollution Control (APC) segment. The FUEL CHEM segment maintained stable revenue at $3.1 million, while the APC segment revenue dropped to $2.5 million from $3.9 million in the prior year. Despite the top-line decline, both segments saw improved gross margins—FUEL CHEM expanded to 46.8% from 45.5%, and APC’s margin increased to 43.9% from 39.1%.

Earnings/Net Income
The company reported a net loss of $689,000, or $0.02 per share, in Q2 2025, compared to a loss of $421,000, or $0.01 per share, in Q2 2024. The widening loss reflects a 63.7% year-over-year increase in the net loss, despite modest cost controls and a strong balance sheet. The EPS performance was unfavorable due to the increased losses.

Post-Earnings Price Action Review
Following the release of its quarterly earnings, a strategy of purchasing Fuel Tech shares after a revenue increase quarter-over-quarter has historically delivered strong performance. Over the past three years, this approach generated a 135.40% return, far outpacing the 0.00% benchmark. With a CAGR of 34.39% and a Sharpe ratio of 0.57, the strategy demonstrated compelling risk-adjusted returns. Despite a volatility of 60.21%, the strategy’s focus on FTEK’s revenue performance proved highly effective.

CEO Commentary
Vincent J. Arnone, President and CEO, highlighted progress across both the APC and FUEL CHEM segments. He expressed confidence in stronger performance in the second half of 2025, particularly in light of anticipated contract wins and active pursuits in AI-related data centers. Arnone emphasized the company’s strong financial position, with $31 million in cash, cash equivalents, and investments as of June 30, 2025, and no long-term debt.

Guidance
Fuel Tech anticipates securing between $2.5 million and $3.0 million in new APC contracts by the end of August, which would boost its effective backlog. The company expects robust third-quarter performance in the FUEL CHEM segment and full-year revenue to reach its highest level since 2022. Additionally, it plans to initiate a TIFI technology demonstration in Q4 2025 and will continue its DGI technology demonstration at a Western U.S. fish hatchery through Q2 2026.

Additional News
Fuel Tech is actively pursuing new business opportunities in both traditional markets and the rapidly expanding AI data center sector. The company has submitted multiple bids for its SCR technology to address emissions control needs in upcoming U.S. data center projects. Additionally, in July 2025, Fuel Tech initiated a demonstration of its Dissolved Gas Infusion (DGI®) technology at a fish hatchery in the Western U.S., a project expected to continue through Q2 2026. These initiatives underscore the company’s strategic focus on innovation and growth. Management has scheduled a conference call for August 6, 2025, to discuss the results and ongoing business activities.