Arq beats Q1 revenue estimates, reaffirms 2026 revenue guidance

Overview

• US activated carbon producer's Q1 revenue rose 7% yr/yr, beating analyst expectations

• Q1 net loss was smaller than expected, while adjusted EBITDA fell from prior year

• Company reaffirmed 2026 revenue and adjusted EBITDA guidance; GAC optimization review ongoing

Outlook

• Arq reaffirms 2026 revenue guidance of $120-$125 mln and Adjusted EBITDA of $17-$20 mln

• Company expects initial results of GAC optimization review by Q3 2026

• Arq says GAC market fundamentals remain strong, supporting a favorable pricing environment

Result Drivers

• SALES VOLUMES - Revenue growth was driven by increased sales volumes, partially offset by decreased pricing from product mix

• GROSS MARGIN PRESSURE - Gross margin declined due to lower pricing from product mix, an inventory revaluation charge, and GAC carry-costs, partially offset by higher volumes

• INVENTORY REVALUATION - Adjusted EBITDA was negatively impacted by a $0.8 mln non-cash inventory revaluation charge for inventory produced in 2025

Company press release: ID:nGNXbsl0LK

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the commodity chemicals peer group is "buy"

• Wall Street's median 12-month price target for Arq Inc is $3.50, about 47.7% above its May 5 closing price of $2.37

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