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What were the key takeaways from Hudson Technologies's earnings call?

- **20% Revenue Growth**: Driven by 18% volume and 2% price increase, with 32% gross margin (up 630 bps YoY).
- **$210M DLA Contract Renewal**: Solidifies military refrigerant supply partnership since 2016.
- **EPA Data Insights**: 2024 HFC inventory down 18%, but supply-demand imbalance until 2029 due to AIM Act phase-down.
- **M&A Focus**: Seeking service businesses to diversify revenue and reduce seasonality.
- **Cash Position**: $90 million cash on hand for strategic initiatives.

**【Lead Director Remarks】**
- Brian Coleman stepped down as CEO, with the board in final stages of CEO search for candidate with alternative skill sets (e.g., M&A expertise, organic growth strategies).
- Interim CEO Brian Bertolini will lead until new CEO is appointed.

**【Interim CEO/CFO Financial Summary】**
- Q3 2025 revenue: $74 million (+20% YoY), driven by 18% volume growth and 2% price increase.
- Gross margin: 32% (up 630 bps YoY), reflecting higher HFC pricing and cost control.
- Net income: $12.4 million (+59% YoY), with $90 million cash on hand.
- Renewed $210 million DLA contract for refrigerant supply to U.S. military, extending partnership since 2016.

**【Sales & Marketing Highlights】**
- Q3 sales volume growth offset slow start to 2025 season; reclamation activity grew in line with industry (+19% YoY).
- EPA data shows 2024 HFC inventory decline of 18%, but supply-demand imbalance expected until 2029 due to AIM Act phase-down.
- A2L refrigerants (R-32, R-454B) saw successful rollout in 2025, with strong supply chain execution.

**【Q&A Key Highlights】**
- **CEO Skill Set**: New CEO should have M&A experience and ability to diversify into adjacent services (e.g., HVAC field services) to reduce seasonal revenue volatility.
- **HFC Pricing Outlook**: 2026 average HFC prices expected to remain consistent with 2025 levels, despite near-term volatility from HFO supply chain issues.
- **M&A Strategy**: Prioritizing acquisitions of service businesses to expand customer touchpoints and reduce reliance on seasonal refrigerant sales.
- **DLA Impact**: Government shutdown caused minor Q4 2025 revenue delay, but contract remains stable at $30-35 million annual contribution.
- **A2L Growth**: A2Ls will become core business as new HVAC systems adopt lower-GWP refrigerants, complementing long-term R-410A demand.


Hudson Technologies, Inc. (HDSN) Q3 2025 Earnings Call Transcript

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