Perma-Fix Environmental Services' Q3 2025: Contradictions Emerge on Hanford Waste Ramp-Up, West Valley Timeline, DFLAW Start-Up, and PFAS Revenue Timing

Business Commentary:

* Revenue and Profit Growth: - Perma-Fix reported that its revenue increased by $642,000, or approximately 4%, to $17.5 million in Q3 2025 compared to $16.8 million in the same quarter of the previous year. - The growth was primarily driven by a 45% increase in revenue in the Treatment segment, which rose to $13.1 million, with higher waste volumes and a more favorable mix in operations.

• Backlog and Operational Efficiency:
• The company's Treatment segment backlog ended the quarter at $15.4 million, up from $7.9 million a year ago, signifying strong visibility through year-end and into 2026.

• This was attributed to improved productivity and throughput due to automation initiatives, digital scheduling, and plan optimization, contributing to higher throughput and sequential margin improvement.

• PFAS Destruction Initiatives:

• Perma-Fix reported 20,000 gallons of PFAS backlog under contract and an anticipated 25,000 gallons more expected before year-end.

• The advancements in the PFAS destruction initiative are driven by the expected commercialization of its technology, which offers complete destruction of PFAS compounds with a 10% to 20% cost advantage compared to incineration, with 0 air emissions.

• Hanford Project and Waste Management:

• Perma-Fix's success in securing a commercial pathway for secondary waste streams generated during the Hanford vitrification operations positions it for multi-decade high-volume revenues.
• The record decision by the Department of Energy designates Perma-Fix Northwest as the commercial treatment pathway, establishing a critical link in the waste treatment chain for DOE’s cleanup mission.

Contradiction Point 1

Hanford Waste Ramp-up and Revenue Expectations

It involves differing expectations regarding the ramp-up timeline and revenue projections for waste treatment operations at Hanford, which directly impacts financial forecasts and operational planning.

What is the status of the grounding program at Hanford? - Howard Brous (Wellington Shields)

20251110-2025 Q3: We expect to ramp up to 70-80% capacity over the next 18 months, we expect to reach full capacity and generate $70-$80 million annually. - Mark Duff(CEO)

What are your projections for DFLAW production ramp-up and related revenue through 2026? - Howard D. Brous (Wellington Shields)

2025Q2: We anticipate operations to start at 40% capacity, with a revenue range of $2-$3 million per month. Ramping up to 70-80% capacity over the next 18 months, we expect to reach full capacity and generate $70-$80 million annually. - Mark Duff(CEO)

Contradiction Point 2

West Valley Project Timeline and Scope

It involves changes in the timeline and scope of the West Valley project, which affects operational planning and revenue projections.

How do you expect the services business to perform in the coming quarters? - Aaron Spychalla (Craig-Hallum)

20251110-2025 Q3: West Valley's waste management scope was pushed back within the approved budget. It's expected to ramp up in '27 as DOE budgets increase. - Mark Duff(CEO)

Can you provide an update on the Services segment for the next few quarters, particularly for West Valley and RADMAC? - Aaron Michael Spychalla (Craig-Hallum)

2025Q2: We expect to implement the strategy in Q1 of 2026. - Mark Duff(CEO)

Contradiction Point 3

DFLAW Start-up Timeline

It involves differing expectations regarding the start-up timeline for the DFLAW facility, which impacts operational readiness and revenue projections.

How long will the government shutdown impact your business? - Howard Brous (Wellington Shields)

20251110-2025 Q3: DFLAW is expected to start moving waste in late December or early January. - Mark Duff(CEO)

Can you discuss the DFLAW facility start-up delay, Northwest facility preparations, and confidence in starting up before October 15? - Aaron Michael Spychalla (Craig-Hallum)

2025Q2: We expect operations to begin before the end of the year and enter into the operational phase in Q4. - Mark Duff(CEO)

Contradiction Point 4

PFAS Program Revenue and Timing

This contradiction highlights differing expectations regarding the revenue generation timeline for the PFAS program, which is crucial for investors' understanding of the company's financial outlook.

Are there any partnerships in PFAS, and when do you expect them to be established? - Aaron Warwick (Breakout Investors)

20251110-2025 Q3: PFAS is evolving more slowly but making good progress. Revenues are expected to reach $150,000-$200,000 monthly in Q4, increasing to $500,000 monthly by Q2 2026. - Mark Duff(CEO)

What are the economics and expected operating margins for the Gen 2 PFAS unit? - Ross Taylor (ARS Investment)

2024Q4: The second-generation unit aims for $5 million in quarterly revenue, with 70% margin incrementally above fixed costs. The $5 million investment covers fabrication, installation, and operational upgrades. - Mark Duff(CEO)

Contradiction Point 5

Hanford Waste Receipts and Timing

It involves the timing and expectations of waste receipts from Hanford, which directly impacts revenue projections and operational planning.

What gross margins do you expect for Hanford waste? - Howard Brous (Wellington Shields)

20251110-2025 Q3: DFLAW is expected to start moving waste in late December or early January. They currently have about 40,000-50,000 gallons of waste. - Mark Duff(President)

Is the Hanford waste under the ITDC contract, and what are the specific details? - Aaron Warwick (Breakout Investors)

2025Q1: Most of the increased waste receipts from Hanford are from the ITDC contract. Typically, about $1 million a month is received from Hanford, with recent months showing receipts of $2 million to $3 million. - Mark Duff(President and CEO)