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- **FUEL CHEM Segment Surges**: 2025 revenue guidance raised to $16.5M-$17M, up 10% YoY, driven by new customer demonstration and legacy dispatch growth.
- **APC Backlog Expansion**: $9.5 million backlog (+55% YoY), with $3.2 million in Q3 wins and $3M-$5M in pipeline for year-end closure.
- **Strategic Acquisition Payoff**: $350,000 Wahlco IP acquisition to generate $2M+ in annual aftermarket revenue and enable $10M+ capital project wins by 2026.
- **Data Center Gold Rush**: $80M-$100M SCR pipeline targeting AI/data center power generation, with 2-3 deals expected to close by Q1 2026.
- **Financial Strength**: $34 million cash, no debt, and 49% gross margins position company for growth in high-demand power generation and emissions control markets.

**【CEO Summary Section】**
- **Profitable Q3 2025**: Operated with positive net income of $303,000 and enhanced gross margins to 49% of revenues, up from 43% in Q3 2024. Maintained strong financial position with $34 million in cash and no long-term debt.
- **FUEL CHEM Growth**: Segment revenue rose to $4.8 million, driving full-year guidance to $16.5M-$17M (up from $15M-$16M). New 6-month demonstration program with a U.S. customer could add $2.5M-$3M annual revenue in 2026.
- **APC Segment Challenges**: Q3 revenue declined due to project timing, but secured $3.2 million in new contracts, raising backlog to $9.5 million. Pursuing $3M-$5M in additional contracts by year-end.
- **Strategic Acquisition**: Acquired Wahlco, Inc.'s APC IP for $350,000, adding flue gas conditioning and urea-to-ammonia technologies. Anticipates near-term aftermarket contributions and long-term capital project opportunities.
- **Data Center Pipeline**: $80M-$100M pipeline for SCR solutions, with 2-3 commercial opportunities expected to close by Q1 2026. Engaging turbine OEMs, aircraft engine repurposers, and system integrators.
- **DGI Progress**: Extended demonstration at a Midwest fish hatchery until Q1 2026. Expanded sales network to target pulp, food, and chemical markets.

**【CFO Financial Commentary】**
- **Revenue Performance**: Q3 2025 revenue $7.5 million (-5% YoY) due to APC timing, offset by FUEL CHEM growth (+4%).
- **Gross Margin Expansion**: 49% (vs. 43% YoY), driven by FUEL CHEM volume and APC ancillary sales (spares, services).
- **Cost Management**: Flat SG&A at $3.2 million, R&D up 25% to $450,000 for DGI. Positive operating cash flow of $4.6 million YTD.
- **Profitability**: Net income $0.01 per share (vs. $0.00 YoY). Adjusted EBITDA $228,000 (vs. -$35,000 YoY).
- **Balance Sheet**: $33.8 million in cash, $41 million in equity, and no debt.

**【Q&A Highlights】**
- **Acquisition Monetization**: Minimal incremental investment needed. Near-term aftermarket gains, with capital project wins expected in 2026+.
- **Data Center Strategy**: Engaging turbine OEMs, aircraft engine repurposers, and integrators. 2-3 commercial deals could close by Q1 2026, with potential for platform expansion.
- **Pipeline Visibility**: $80M-$100M data center pipeline, excluding $10M-$20M traditional APC opportunities. Q4 2025 cash flat to slightly down from Q3 levels.

Fuel Tech, Inc. (FTEK) Q3 2025 Earnings Call Transcript

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FTEK

FTEK fundamentals

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