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What were the key takeaways from Quest Resource’s earnings call?

- **Revenue Resilience**: Sequential growth of 6.4% to $63.3M, offsetting industrial market weakness.
- **Margin Expansion**: Gross margin improved 200bps YoY to 18.1%, driven by operational efficiency.
- **Debt Reduction**: $11.2M debt paid down YTD, with plans to prioritize higher-cost debt.
- **Strategic Wins**: New contracts in retail and hospitality, expanding share of wallet with existing clients.
- **Operational Excellence**: 25+ KPIs tracking process improvements, reducing DSO to 70s.

**【Management Opening Remarks】**
- CEO Perry Moss highlighted a solid Q3 with sequential financial improvement, driven by operational excellence initiatives despite macroeconomic challenges.
- Emphasis on cost reduction, cash flow generation, and margin optimization, with confidence in 2026 growth.

**【CEO Commentary】**
- **Operational Excellence**: Streamlined processes, enhanced customer engagement, and vendor management improvements.
- **Share of Wallet Expansion**: Added services for existing clients, including cardboard and food waste management, with new contracts in retail and hospitality.
- **New Client Wins**: Secured major retailer and restaurant chain contracts, with a focus on non-industrial markets for Q4 stability.
- **Vendor Relationships**: Stronger partnerships reducing service disruptions and costs.

**【CFO Financial Commentary】**
- **Revenue**: $63.3M (13% YoY decline, 6.4% sequential growth) due to mall business divestiture and industrial volume challenges.
- **Gross Profit**: $11.5M (2% YoY decline, 3.9% sequential growth), with margin improvement to 18.1% (200bps YoY).
- **SG&A**: $9.2M (10% YoY reduction), driven by workforce optimization and cost-cutting.
- **Cash Flow**: $5.7M generated, reducing DSO to 70s and paying down $4.6M debt.

**【Q&A Highlights】**
- **Industrial Market Outlook**: Stabilized but seasonally weak in Q4; focus on share of wallet and non-industrial clients.
- **Operational KPIs**: 25+ metrics tracking process efficiency, with sequential improvements.
- **Debt Strategy**: Aggressive debt reduction targeting higher-cost debt post-Q1 2026 restrictions.
- **Data monetization**: Exploring subscription model for customer data access.


Quest Resource Holding Corporation (QRHC) Q3 2025 Earnings Call Transcript

- **Revenue decline accelerates**: Q2 revenue down 19% YoY to $59.5M, driven by industrial market weakness (-$16M) and mall divestitures (-$3M).
- **Cash flow improvement**: $3.9M operating cash flow in Q2, with $6.6M debt reduction YTD; targeting mid-60s DSOs.
- **New client growth**: $8M in incremental revenue from new clients, including competitive wins in retail and restaurant sectors.
- **Margin challenges**: Temporary margin pressure from renewals in cost-sensitive markets, offset by shared cost savings and new client ramp-up.
- **Debt repayment focus**: Aggressive debt reduction continues, with no near-term plans for reinvestment in growth initiatives.

**【Management Opening Remarks】**
- CEO Perry Moss emphasized progress in operational excellence, with $3.9 million in Q2 operating cash flow and $6.6 million debt reduction year-to-date.
- CFO Brett Johnston highlighted challenges in the industrial market, noting a 19% YoY revenue decline to $59.5 million, partially due to mall-related business divestitures.
- The company remains focused on debt repayment, with $69.7 million in net notes payable at quarter-end.

**【CEO Summary Section】**
- New client wins include a doubled partnership with a large retailer and a new restaurant chain, both competitive wins based on value proposition.
- Gross profit dollars stabilized sequentially at $11 million, despite margin pressure from renewals in cost-sensitive industrial markets.
- Operational improvements, such as a 46% reduction in late payments to vendors and 83% improvement in vendor bill processing, are driving cash cycle efficiency.
- Long-term strategy focuses on share-of-wallet growth and optimizing service margins through cost savings shared with clients.

**【CFO Financial Commentary】**
- Sequential SG&A reduction of $2.1 million to $9.3 million reflects workforce optimization and cost control.
- Cash generation initiatives, including DSO improvements and reduced working capital, are expected to drive further debt reduction in H2.
- Gross profit dollars expected to be flat to down in Q3, with sequential growth resuming in Q4 as new clients ramp up.

**【Q&A Key Highlights】**
- **Revenue Decline**: Industrial end-market weakness (-$16 million YoY) and mall divestitures (-$3 million) offset $8 million in new client growth.
- **Margin Pressure**: Renewals in cost-sensitive markets (e.g., industrials) are temporarily reducing margins, but shared cost savings are expected to offset this in H2.
- **Cash Flow**: Q2 operating cash flow of $3.9 million reflects DSO improvements; targeting mid-60s DSOs by next year.
- **Debt Focus**: Repayment remains priority, with $6.6 million reduction YTD and plans to continue aggressive paydown.
- **Client Attrition**: No major customer losses; attrition driven by market trends, not relationship issues.


Quest Resource Holding Corporation (QRHC) Q2 2025 Earnings Call Transcript

- **Revenue decline explained**: $7M from client attrition, $8M from industrial sector weakness.
- **Cost savings materializing**: $3M annual SG&A reduction from RWS sale, Q2+ SG&A target of $9.5M.
- **Gross margin recovery path**: Q2+ improvements from onboarding costs abating and new client optimization.
- **Debt flexibility enhanced**: Amended debt terms provide runway for operational turnaround.
- **2025 growth plan**: H2 resumption of top/bottom line growth via operational efficiency and new client ramp.


**【Chairman's Strategic Update】**
- Sold non-core RWS business for $5M, reducing debt and cutting annual SG&A by $3M.
- Promoted Perry Moss to CEO and added Nick Ober as SVP of Operations.
- Amended debt agreements with PNC and Monroe for increased financial flexibility.
- Board expanded with Bob Lipstein, a seasoned financial executive.

**【CFO Financial Highlights】**
- Q1 2025 Revenue: $68.4M (-6% YoY, -2% QoQ) due to $7M client attrition and $8M volume decline.
- Gross Profit: $10.9M (-22% YoY) from attrition, volume drop, margin mix shift, and onboarding costs.
- SG&A: $11.4M (+16% YoY) due to separation costs and resumed bonus accruals.
- Cash: $1.4M with $21M available on $45M credit line.
- DSO: 85 days (targeting 65+ days by Q2 via AP automation).

**【CEO Operational Initiatives】**
- Launched "Operations Excellence" program to improve efficiency, cash flow, and profitability.
- Implemented vendor management platform for zero-touch processing.
- Onboarding 2024 clients at 80% run rate, expecting full contribution by year-end.
- Pipeline expansion focused on existing client share of wallet and new customer referrals.
- Targeting Q2+ improvements in gross margin and EBITDA from process optimizations.

**【Q&A Key Takeaways】**
- Client attrition ($7M YoY) driven by mall-related business sale and acquired clients switching programs.
- Industrial sector weakness expected to persist but not impact collectability.
- AR improvements via AP automation and direct client engagement.
- 2025 outlook: Top/bottom line growth resuming in H2 with debt reduction focus.


Quest Resource Holding (QRHC)-12 May 25-2025 Q1 Earnings call transcript

- **Leadership Change**: Perry Moss appointed CEO, driving operational efficiency and $3M annual cost savings.
- **Revenue Growth**: Q4 2024 revenue $70M (+1% YoY), despite $9M decline from attrition and industrial weakness.
- **Debt Optimization**: 150bps interest rate reduction saves $1M annually, with extended debt maturity to 2030.
- **Market Recovery**: Industrial end markets expected to improve in H2 2025, supporting top-line growth.
- **Execution Focus**: 2025 priorities include vendor system completion, DSO reduction to mid-60s, and EBITDA growth.

**【Management Opening Remarks】**
- **CEO Transition**: Ray Hatch retired as CEO, replaced by Perry Moss, who brings 30+ years of industry experience. Moss will focus on operational efficiency and growth.
- **Business Sale**: Announced sale of non-core mall business to reduce complexity and improve margins. Expected to close in Q1 2025.
- **Cost Reduction**: Implemented 15% workforce reduction and $3M annualized G&A cost savings to improve profitability.

**【CEO (Perry Moss) Summary】**
- **Strategy Focus**: Emphasizes metric-driven sales, process automation, and KPIs to enhance efficiency and client satisfaction.
- **Pipeline Growth**: Record pipeline growth with disciplined sales process, including Stage 1-4 tracking for deal visibility.
- **Operational Excellence**: Launched initiative to benchmark and optimize workflows across the organization, targeting scale benefits and margin expansion.

**【CFO (Brett Johnston) Financial Commentary】**
- **Q4 2024 Results**: Revenue $70M (1% YoY growth), gross profit $10.7M (-6.7% YoY) due to cost increases and $1M non-cash adjustments.
- **Client Onboarding**: 8 new clients added, contributing $12M revenue, but delays caused $9M YoY revenue decline from attrition and weak industrial demand.
- **Debt Refinancing**: Reduced interest rate by 150bps, saving $1M annually, with extended maturity dates to 2030.
- **Cash Flow**: Liquidity strong at $21.9M, but DSO elevated at 80 days due to slow mall business collections.

**【Q&A Highlights】**
- **Vendor Management System**: Near completion, with zero-touch invoice processing reducing costs. Q1 2025 will show full benefits.
- **Industrial Market**: Weakness expected for 2-3 quarters, but signs of recovery in H2 2025.
- **M&A Outlook**: No plans for 2025; focus on debt paydown and operational efficiency.
- **Attrition Causes**: 1/3 from mall business sale, 2/3 from client M&A and industrial weakness.
- **DSO Target**: Aiming to reduce from 80 to mid-60s via faster billing and mall business exit.

Quest Resource Holding (QRHC)-12 Mar 25-2024 Q4 Earnings call transcript

Quest Resource Holding (QRHC)-7 Nov 24-2024 Q3 Earnings call transcript

Quest Resource Holding (QRHC)-8 Aug 24-2024 Q2 Earnings call transcript

Quest Resource Holding (QRHC)-9 May 24-2024 Q1 Earnings call transcript

Quest Resource Holding (QRHC)-12 Mar 24-2023 Q4 Earnings call transcript

Quest Resource Holding (QRHC)-14 Nov 23-2023 Q3 Earnings call transcript

Quest Resource Holding (QRHC)-15 Aug 23-2023 Q2 Earnings call transcript

Quest Resource Holding (QRHC)-15 May 23-2023 Q1 Earnings call transcript

Quest Resource Holding (QRHC)-23 Mar 23-2022 Q4 Earnings call transcript

Quest Resource Holding (QRHC)-15 Nov 22-2022 Q3 Earnings call transcript

Quest Resource Holding (QRHC)-16 Aug 22-2022 Q2 Earnings call transcript

Quest Resource Holding (QRHC)-17 May 22-2022 Q1 Earnings call transcript

Quest Resource Holding (QRHC)-18 Mar 22-2021 Q4 Earnings call transcript

Quest Resource Holding (QRHC)-16 Nov 21-2021 Q3 Earnings call transcript

Quest Resource Holding (QRHC)-17 Aug 21-2021 Q2 Earnings call transcript

Quest Resource Holding (QRHC)-18 May 21-2021 Q1 Earnings call transcript

Quest Resource Holding (QRHC)-12 Mar 21-2020 Q4 Earnings call transcript

Quest Resource Holding (QRHC)-16 Nov 20-2020 Q3 Earnings call transcript

Quest Resource Holding (QRHC)-13 Aug 20-2020 Q2 Earnings call transcript

Quest Resource Holding (QRHC)-15 May 20-2020 Q1 Earnings call transcript

Quest Resource Holding (QRHC)-13 Mar 20-2019 Q4 Earnings call transcript

Quest Resource Holding (QRHC)-14 Nov 19-2019 Q3 Earnings call transcript

Quest Resource Holding (QRHC)-14 Aug 19-2019 Q2 Earnings call transcript

Quest Resource Holding (QRHC)-16 May 19-2019 Q1 Earnings call transcript

Quest Resource Holding (QRHC)-14 Mar 19-2018 Q4 Earnings call transcript

Quest Resource Holding (QRHC)-13 Nov 18-2018 Q3 Earnings call transcript

Quest Resource Holding (QRHC)-14 Aug 18-2018 Q2 Earnings call transcript

Quest Resource Holding (QRHC)-15 May 18-2018 Q1 Earnings call transcript

Quest Resource Holding (QRHC)-14 Nov 17-2017 Q3 Earnings call transcript

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