Quest Resource Holding Corporation Reports Fourth Quarter and Fiscal Year 2025 Financial Results

Key Financial and Strategic Highlights

• Revenue: Q4 2025 revenue was \$58.9 million, representing a significant 15.8% decrease year-over-year and a 7.7% decline from Q3 2025. Full-year 2025 revenue was \$250.2 million, down 13.3% compared to 2024.
• Profitability: Gross profit for Q4 was \$9.1 million, a 15.1% decrease year-over-year and a 20.6% sequential decline. FY2025 gross profit was \$42.5 million, down 14.9% from FY2024. Gross margin for Q4 was 15.5% (up slightly from 15.3% in Q4 2024), and full-year gross margin was 17.0% (vs. 17.3% in FY2024).
• Net Loss: Q4 GAAP net loss was \$1.7 million, a marked improvement from the \$9.5 million net loss in Q4 2024. For FY2025, GAAP net loss was \$15.4 million, roughly flat compared to \$15.1 million in FY2024. GAAP net loss per share for Q4 was \$(0.08) compared to \$(0.46) in Q4 2024. FY2025 net loss per share was \$(0.73), unchanged from the prior year.
• Adjusted EBITDA: Q4 Adjusted EBITDA reached \$2.1 million, up from \$1.7 million a year ago. For FY2025, Adjusted EBITDA was \$9.3 million compared to \$14.5 million in FY2024, reflecting ongoing margin pressures.
• Debt Reduction: The company reduced its debt by \$2.0 million in Q4 and by \$13.2 million for the full year, representing a 16.4% reduction.
• Liquidity and Refinancing: Quest refinanced its asset-based lending (ABL) credit facility with Texas Capital Bank and secured covenant easements through 2027, providing additional financial flexibility during a challenging macroeconomic environment.

Business and Operational Developments

• Customer Wins and Initiatives: Quest launched significant share-of-wallet expansions with two major customers and successfully onboarded a new full-service restaurant customer. These wins are expected to support organic growth and improve the 2026 outlook.
• Operational Efficiency: The company has made strategic efforts over the past year to drive efficiency and cost control across all business functions. Management believes these initiatives are delivering improved underlying performance, even though macroeconomic pressures—especially lower volumes from large industrial customers—continue to weigh on results.
• Financial Flexibility: The recent refinancing and covenant amendments provide the company with ample room to operate and invest in growth initiatives, despite ongoing market headwinds.

Management Commentary

“The strategic efforts made over the past year to drive operational efficiency across the business are making solid progress, but the business continues to navigate a difficult macroeconomic environment. We are on much more solid footing and Quest is a fundamentally stronger business focused on delivering improved results in 2026.”

– Dan M. Friedberg, Chairman of the Board

“Recent new contract wins are ramping as expected, and we are seeing encouraging traction with share-of-wallet initiatives that are delivering incremental organic growth. Altogether, we see these initiatives supporting an improved outlook for 2026.”

– Perry W. Moss, CEO

“We continue to look for proactive measures to improve our financing costs and give ourselves greater flexibility on our lines of credit as our initiatives to improve profitability and cash flow take hold.”

– Brett Johnston, CFO

Balance Sheet and Liquidity Position

• Cash and Equivalents: \$1.0 million at December 31, 2025, up from \$0.4 million at the prior year-end.
• Accounts Receivable: \$49.0 million, down from \$62.3 million a year ago, reflecting lower revenues but also potential improvements in collections or customer mix.
• Total Assets: \$145.6 million at year-end 2025 vs. \$175.6 million at year-end 2024.
• Total Debt: \$65.0 million (including current and long-term portions), down from \$77.9 million at December 31, 2024.
• Stockholders’ Equity: \$40.5 million, down from \$54.2 million a year earlier, reflecting losses incurred during the period.

Shareholder-Relevant and Potentially Price-Sensitive Information

• Revenue Decline but Margin Stability: While revenues and gross profits are down significantly, gross margin rates have remained relatively stable, indicating management’s success in controlling costs.
• Significant Debt Reduction and Improved Liquidity: The company’s ability to reduce debt by over 16% in a difficult environment and secure new credit arrangements should be viewed as a positive for financial stability and future flexibility.
• Customer and Growth Initiatives: New contracts and wallet share expansions are ramping up and have the potential to offset macroeconomic headwinds and drive growth in 2026.
• Improved Bottom-Line Trend: The Q4 net loss shrank meaningfully versus the prior year, and Adjusted EBITDA improved, signaling that the company’s turnaround efforts are gaining traction.
• Ongoing Risks: Management notes that the company continues to face lower volumes from large industrial customers and ongoing sector-wide challenges, which could continue to pressure results in the near term.

Conference Call Details

The company will host a conference call to discuss results at 5:00 PM ET on March 12, 2026. Investors may participate via dial-in or webcast, with a replay available for 90 days on the company’s website.

Outlook

Management remains cautiously optimistic about an improved outlook for 2026, driven by operational initiatives and new business wins, despite acknowledging that macroeconomic pressures may persist.

Disclaimer: This article is provided for informational purposes only and should not be construed as investment advice. The information is based on publicly available filings and company disclosures as of the reporting date. Investors should consult the company’s SEC filings and other sources and consider their own circumstances before making any investment decisions. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected.

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