PESI — Perma-Fix Environmental Services, Inc.

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

1. Key Financial Results and Metrics

• Q4 Revenue: $15.7 million, up 6.9% from $14.7 million in Q4 2024.
• Full Year Revenue: $61.7 million, a 4.3% increase from $59.1 million in 2024.
• Treatment Segment Revenue: Increased by 29% year-over-year, driven by higher waste volumes and improved pricing dynamics.
• Services Segment Revenue: Declined by $7.6 million for the year due to project timing and procurement delays.
• Gross Profit: Q4 gross profit rose to $1.2 million 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 improved to $13.8 million from $20 million in 2024.
• EBITDA: Q4 EBITDA loss of $2.7 million, improved from a loss of $3 million in Q4 2024; full-year EBITDA loss of $9.7 million, better than $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: Renewed permit for Perma-Fix Northwest facility, tripling liquid processing capacity to 1.2 million gallons annually.
• International Growth: Revenue from foreign entities surged 163% year-over-year to $6.4 million, reflecting increased demand for waste treatment services globally.
• PFAS Technology Development: Advancements in PFAS destruction technology with a new system expected to triple capacity and reduce operational costs.
• Backlog Growth: Treatment backlog increased by 51% year-over-year to approximately $1.9 million, indicating strong demand for services.

3. Forward Guidance and Outlook

• Q1 2026 Expectations: Anticipated softer performance due to delays in DFLAW waste receipts and seasonal weaknesses, with expected losses exceeding $4 million on about $13 million in revenue.
• Q2 2026 Outlook: Stronger activity anticipated with expected revenue ramp-up from DFLAW and new waste streams, projecting $1 million to $2 million in monthly revenue starting in Q2.
• Long-Term Opportunities: Significant potential from Hanford-related projects, including a $4 billion RFP for tank waste grouting expected to begin in 2028.

4. Bad News, Challenges, or Points of Concern

• Q1 Performance: Expected to be weaker than usual due to delays in waste receipts and seasonal factors.
• Net Losses: Continued net losses, although improved year-over-year, raise concerns about profitability.
• Dependence on DOE Execution: The pace of revenue growth is heavily reliant on the Department of Energy's operational efficiency and project timelines, which remain uncertain.

5. Notable Q&A Insights

• Q2 Performance Confidence: Management expressed confidence in Q2 performance due to new project mobilizations and increased waste streams from DFLAW.
• Grouting Program: Discussion on the grouting program highlighted its significance for long-term revenue, with Perma-Fix well-positioned to capitalize on this opportunity.
• PFAS Treatment Pricing: Pricing for PFAS treatment varies based on volume, with larger quantities priced between $10 and $15 per gallon, indicating potential for strong margins.
• International Opportunities: Management indicated that while international revenue might decline slightly in 2026, it is expected to ramp up significantly in 2027, with ongoing projects in Canada and Europe.

Overall, Perma-Fix is navigating through challenges while positioning itself for growth through strategic investments, particularly in the Hanford cleanup efforts and PFAS technology advancements.