PESI — Perma-Fix Environmental Services, Inc.

Summary of Perma-Fix Environmental Services (PESI) Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Q4 2025 Revenue: $15.7 million, up 6.9% from $14.7 million in Q4 2024.
• Full Year 2025 Revenue: $61.7 million, a 4.3% increase from $59.1 million in 2024.
• Treatment Segment Revenue: Increased by approximately 29% year-over-year, driven by higher waste volumes and improved pricing dynamics.
• Services Segment Revenue: Decreased by $1.6 million in Q4 and $7.6 million for the full year due to project timing and procurement delays.
• Gross Profit: Q4 gross profit was $1.2 million, up from $594,000 in Q4 2024; full year gross profit increased by $6 million.
• Net Loss: Q4 net loss of $5.7 million compared to a loss of $3.5 million in Q4 2024; full year net loss of $13.8 million, improved from $20 million in 2024.
• EBITDA: Q4 EBITDA loss of $2.7 million; full year EBITDA loss of $9.7 million, improved from $13.8 million in 2024.
• Cash Position: Cash on hand decreased to $11.8 million from $29 million in 2024.

2. Strategic Updates and Business Highlights

• Operational Focus: Strengthening operational foundation to support the Department of Energy's Hanford cleanup mission, particularly the Direct Feed Low-Activity Waste (DFLAW) program.
• Permit Renewal: Successfully renewed the permit for the Perma-Fix Northwest facility, tripling liquid processing capacity to 1.2 million gallons annually.
• International Revenue Growth: Increased by 163% year-over-year to $6.4 million, indicating strong demand for specialized waste treatment services globally.
• PFAS Technology Development: Advancements in PFAS destruction technology with a new system expected to triple capacity and reduce operational costs.

3. Forward Guidance and Outlook

• Q2 2026 Expectations: Anticipated revenue ramp-up with initial estimates of $1 million to $2 million per month from DFLAW beginning in May, with additional waste receipts expected.
• Long-Term Opportunities: Potential for significant growth from Hanford-related waste streams, including a $4 billion RFP for tank retrieval and grouting expected to begin in 2028.
• Operational Improvements: Plans to increase treatment capacity to 4.2 million gallons annually through permit modifications, enhancing ability to meet future waste treatment demands.

4. Bad News, Challenges, or Points of Concern

• Q1 2026 Performance: Expected to be weaker than usual due to delays in DFLAW effluent receipts and seasonal activity slowdowns, with projected losses exceeding $4 million in negative EBITDA.
• Services Segment Decline: Ongoing project mobilization delays and seasonal impacts have led to a decline in the Services segment, affecting overall revenue.
• Cash Flow Concerns: Significant cash used in operations, with a decrease in cash reserves compared to the previous year, raising concerns about liquidity.

5. Notable Q&A Insights

• Q2 Performance Confidence: Management expressed optimism for Q2 based on new project mobilizations and expected waste streams, including a $1.5 million monthly revenue stream from surface water waste treatment.
• Grouting Program Insights: Discussion on the potential for grouting waste from the Hanford site, with management highlighting the strategic advantage of being a local facility.
• PFAS Capacity and Pricing: Current PFAS treatment capabilities are operational, with pricing ranging from $10 to $15 per gallon for larger volumes, aiming for margins of 60% to 70%.
• International Project Pipeline: Management noted ongoing international projects and a strong pipeline of opportunities, although revenue from international activities is expected to be slightly lower in 2026 compared to 2025.

Overall, while Perma-Fix is positioned for growth with significant opportunities in waste treatment and remediation, it faces short-term challenges that may impact financial performance in the near term.