Quest Resource Holding Corporation Reports Second Quarter 2024 Financial Results
Quest Resource Holding (Nasdaq: QRHC) reported financial results for Q2 2024. Despite a 1.8% decrease in revenue to $73.1 million, the company maintained flat gross profit at $13.5 million and improved gross margin to 18.5%. QRHC reported a GAAP net loss of $(1.5) million, or $(0.07) per share. Adjusted EBITDA slightly increased to $5.1 million.
The company remains on track for double-digit growth in gross profit and adjusted EBITDA during 2024 and 2025. QRHC secured significant new client wins and multiple program expansions with existing clients. Notable achievements include onboarding seven new clients, signing three expansion agreements, and being added to the Russell 2000 and 3000 Indexes.
Quest Resource Holding (Nasdaq: QRHC) ha riportato i risultati finanziari per il secondo trimestre del 2024. Nonostante una diminuzione del 1,8% dei ricavi a $73,1 milioni, l'azienda ha mantenuto un utile lordo stabile a $13,5 milioni e ha migliorato il margine lordo al 18,5%. QRHC ha registrato una perdita netta GAAP di $(1,5) milioni, ovvero $(0,07) per azione. L'EBITDA rettificato è leggermente aumentato a $5,1 milioni.
L'azienda rimane sulla buona strada per una crescita a due cifre nell'utile lordo e nell'EBITDA rettificato durante il 2024 e il 2025. QRHC ha ottenuto nuovi clienti significativi e ha ampliato diversi programmi con i clienti esistenti. I risultati notevoli includono l'inserimento di sette nuovi clienti, la firma di tre accordi di espansione e l'inclusione negli indici Russell 2000 e 3000.
Quest Resource Holding (Nasdaq: QRHC) informó los resultados financieros del segundo trimestre de 2024. A pesar de una disminución del 1,8% en los ingresos a $73,1 millones, la empresa mantuvo una utilidad bruta estable de $13,5 millones y mejoró el margen bruto al 18,5%. QRHC reportó una pérdida neta GAAP de $(1,5) millones, o $(0,07) por acción. El EBITDA ajustado aumentó ligeramente a $5,1 millones.
La empresa sigue en camino hacia un crecimiento de dos dígitos en la utilidad bruta y el EBITDA ajustado durante 2024 y 2025. QRHC aseguró importantes nuevos contratos y múltiples expansiones de programas con clientes existentes. Logros destacados incluyen la incorporación de siete nuevos clientes, la firma de tres acuerdos de expansión y ser añadido a los índices Russell 2000 y 3000.
퀘스트 리소스 홀딩(나스닥: QRHC)은 2024년도 2분기 재무 결과를 발표했습니다. 수익이 1.8% 감소하여 7310만 달러에 이르렀음에도 불구하고, 회사는 총 이익을 1350만 달러로 유지하며 총 마진을 18.5%로 개선했습니다. QRHC는 GAAP 기준 순손실이 150만 달러, 주당 손실은 0.07 달러로 보고했습니다. 조정된 EBITDA는 소폭 증가하여 510만 달러가 되었습니다.
회사는 2024년과 2025년 동안 총 이익과 조정된 EBITDA에서 두 자릿수 성장을 목표로 하고 있습니다. QRHC는 중요한 신규 고객 확보와 기존 고객과의 여러 프로그램 확장을 이루어냈습니다. 주목할 만한 성과로는 7명의 신규 고객 유치, 3건의 확장 계약 체결, 러셀 2000 및 3000 지수 추가 편입이 포함됩니다.
Quest Resource Holding (Nasdaq: QRHC) a annoncé ses résultats financiers pour le deuxième trimestre 2024. Malgré une diminution de 1,8 % des revenus à 73,1 millions de dollars, l'entreprise a maintenu un bénéfice brut stable de 13,5 millions de dollars et a amélioré sa marge brute à 18,5 %. QRHC a enregistré une perte nette GAAP de $(1,5) million, soit $(0,07) par action. L'EBITDA ajusté a légèrement augmenté pour atteindre 5,1 millions de dollars.
L'entreprise reste sur la bonne voie pour une croissance à deux chiffres du bénéfice brut et de l'EBITDA ajusté en 2024 et 2025. QRHC a remporté des contrats significatifs avec de nouveaux clients et a élargi plusieurs programmes avec des clients existants. Parmi les réalisations notables, citons l'intégration de sept nouveaux clients, la signature de trois accords d'expansion et l'ajout aux indices Russell 2000 et 3000.
Quest Resource Holding (Nasdaq: QRHC) hat die Finanzzahlen für das 2. Quartal 2024 veröffentlicht. Trotz eines Rückgangs der Einnahmen um 1,8 % auf 73,1 Millionen US-Dollar hielt das Unternehmen den Bruttogewinn stabil bei 13,5 Millionen US-Dollar und verbesserte die Bruttomarge auf 18,5 %. QRHC meldete einen GAAP-Nettoverlust von $(1,5) Millionen oder $(0,07) pro Aktie. Das angepasste EBITDA stieg leicht auf 5,1 Millionen US-Dollar.
Das Unternehmen liegt auf Kurs für ein zweistelliges Wachstum beim Bruttogewinn und beim angepassten EBITDA im Jahr 2024 und 2025. QRHC sicherte sich bedeutende neue Kunden und erweiterte mehrere Programme mit bestehenden Kunden. Zu den bemerkenswerten Erfolgen gehört die Akquisition von sieben neuen Kunden, der Abschluss von drei Erweiterungsverträgen und die Aufnahme in die Russell 2000 und 3000 Indizes.
- Maintained flat gross profit at $13.5 million despite revenue decrease
- Improved gross margin to 18.5% from 18.1% in Q2 2023
- Slight increase in Adjusted EBITDA to $5.1 million
- Secured a new client in grocery vertical expected to produce eight figures in annual revenue
- Onboarded seven new clients and signed three expansion agreements with existing clients
- Added to Russell 2000 and 3000 Indexes
- On track for double-digit growth in gross profit and adjusted EBITDA for 2024 and 2025
- Revenue decreased 1.8% to $73.1 million compared to Q2 2023
- GAAP net loss increased to $(1.5) million from $(0.9) million in Q2 2023
- Adjusted net income per diluted share decreased to $0.03 from $0.07 in Q2 2023
- Lower-than-expected production volumes at one of the largest clients due to soft market conditions
Insights
Quest Resource Holding 's Q2 2024 results show a mixed performance. While revenue decreased by
Despite these challenges, there are positive indicators. Gross margin improved to
Quest's focus on client expansion and new client acquisition is promising, with seven new clients onboarded and three expansion agreements signed. The addition to the Russell 2000 and 3000 Indexes could increase visibility and potentially attract more investors.
Quest's performance reflects broader market trends in the waste management and recycling industry. The company's ability to maintain gross profit despite revenue decline suggests effective cost management. The expansion in the grocery vertical, expected to generate eight-figure annual revenue, aligns with the growing emphasis on sustainability in retail.
The company's investment in AI-enhanced automation for accounts payable processing demonstrates a commitment to operational efficiency, a important factor in this competitive industry. This tech-forward approach could be a significant differentiator.
Quest's projection of double-digit growth in gross profit and adjusted EBITDA for 2024 and 2025 is ambitious but not unrealistic given their new client acquisitions and expansion agreements. However, the soft conditions in one of their largest client's end markets highlight the importance of diversification to mitigate risks associated with industry-specific downturns.
On track for double-digit growth in gross profit and adjusted EBITDA during 2024 and 2025
Significant new client win and multiple program expansion wins with existing clients
Added to the Russell 2000 and 3000 Indexes
THE COLONY, Texas, Aug. 08, 2024 (GLOBE NEWSWIRE) -- Quest Resource Holding Corporation (Nasdaq: QRHC) (“Quest” or the “Company”), a national leader in environmental waste and recycling services, today announced financial results for the second quarter ended June 30, 2024.
“I am incredibly proud of the positive reaction and feedback we have received from clients we are onboarding, one of which has already committed to expanding our engagement with additional services. It is great to see that investments in our platform to ensure seamless implementation combined with outstanding client service are resulting in significant value add for our clients. We believe we continue to differentiate Quest from the competition and are further solidifying our position as the waste and recycling services provider of choice,” said S. Ray Hatch, President and Chief Executive Officer of Quest.
“We saw strong revenue growth with existing and new clients, which was offset by lower-than-expected production volumes at one of our largest clients due to soft conditions in their end market. After some client-related delays, implementations from all new client wins are now well underway. With the steady ramp of new clients, expanded engagements from existing clients, and new client wins from a growing pipeline, we remain on track for double digit gross profit dollar and adjusted EBITDA growth during 2024, 2025 and beyond.”
Second Quarter 2024 Highlights
- Revenue was
$73.1 million , a1.8% decrease compared with the second quarter of 2023. - Gross profit was
$13.5 million , which was flat compared with the second quarter of 2023. - Gross margin was
18.5% of revenue compared with18.1% for the second quarter of 2023. - GAAP net loss was
$(1.5) million , compared with GAAP net loss of$(0.9) million during the second quarter of 2023. - GAAP net loss per basic and diluted share attributable to common stockholders was
$(0.07) , compared with$(0.04) for the second quarter of 2023. - Adjusted EBITDA was
$5.1 million , compared with$5.0 million during the second quarter of 2023. - Adjusted net income per diluted share was
$0.03 , compared with adjusted net income of$0.07 per diluted share during the second quarter of 2023.
Year-to-Date 2024 Highlights (June 30, 2024)
- Revenue was
$145.8 million , a1.9% decrease compared with the same period of 2023. - Gross profit was
$27.6 million , a5.5% increase compared with the same period of 2023. - Gross margin was
18.9% of revenue compared with17.6% during the same period of 2023. - GAAP net loss was
$(2.2) million , compared with GAAP net loss of$(2.9) million during the same period of 2023. - GAAP net loss per basic and diluted share attributable to common stockholders was
$(0.11) , compared with$(0.15) during the same period of 2023. - Year-to-date Adjusted EBITDA was
$10.3 million , a13.7% increase compared to$9.0 million during the same period of 2023. - Adjusted net income per diluted share was
$0.10 , compared with$0.10 per diluted share during the same period of 2023.
Recent Highlights
- Onboarded and began ramping seven new clients to date, a first for the Company.
- Signed three expansion agreements with existing clients, each of which is expected to incrementally produce seven figures in annual revenue.
- As previously announced, secured a new client in the grocery vertical that is expected to produce eight figures of annual revenue.
- Expanded efficiency initiatives. Our automated accounts payable processing module, enhanced by artificial intelligence, is now processing about three quarters of vendors through this platform to drive highly efficient zero touch initiative.
- Promoted Perry Moss to the newly created position of Chief Revenue Officer.
- Added to the Russell 2000® and Russell 3000® Indexes as part of the Russell indexes annual reconstitution.
Second Quarter 2024 Earnings Conference Call and Webcast
Quest will host a conference call on Thursday, August 8, 2024, at 5:00 PM ET, to review the financial results for the second quarter ended June 30, 2024. To participate, dial 1-800-717-1738 or 1-646-307-1865. The conference call, which may include forward-looking statements, is also being webcast and is available via the investor relations section of Quest’s website at https://investors.qrhc.com/investors. A replay of the webcast will be archived on Quest’s investor relations website for 90 days.
About Quest Resource Holding Corporation
Quest is a national provider of waste and recycling services that enable larger businesses to excel in achieving their environmental and sustainability goals and responsibilities. Quest delivers focused expertise across multiple industry sectors to build single-source, client-specific solutions that generate quantifiable business and sustainability results. Addressing a wide variety of waste streams and recyclables, Quest provides information and data that tracks and reports the environmental results of Quest’s services, gives actionable data to improve business operations, and enables Quest’s clients to excel in their business and sustainability responsibilities. For more information, visit www.qrhc.com.
Reconciliation of U.S. GAAP to Non-GAAP Financial Measures
In this press release, non-GAAP financial measures, “Adjusted EBITDA” and “Adjusted Net Income” are presented. From time-to-time, Quest considers and uses these supplemental measures of operating performance in order to provide an improved understanding of underlying performance trends. Quest believes it is useful to review, as applicable, both (1) GAAP measures that include (i) depreciation and amortization, (ii) interest expense, (iii) stock-based compensation expense, (iv) income tax expense, and (v) certain other adjustments, and (2) non-GAAP measures that exclude such items. Quest presents these non-GAAP measures because it considers it an important supplemental measure of Quest’s performance. Quest’s definition of these adjusted financial measures may differ from similarly named measures used by others. Quest believes these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. These non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for the Company’s GAAP measures. (See attached tables “Reconciliation of Net Loss to Adjusted EBITDA” and “Adjusted Net Income Per Share”).
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, which provides a “safe harbor” for such statements in certain circumstances. The forward-looking statements include, but are not limited to, our belief that we are differentiating ourselves from the competition and further solidifying our position as the waste and recycling services provider of choice, and our expectation that we remain on track for double digit gross profit dollar and adjusted EBITDA growth during 2024, 2025 and beyond. Actual events or results could differ materially from those discussed in the forward-looking statements as a result of various factors, including, but not limited to, competition in the environmental services industry, the impact of the current economic environment, the spread of major epidemics (including Coronavirus) and other related uncertainties such as government-imposed travel restrictions, interruptions to supply chains, commodity price fluctuations, extended shut down of businesses, and other factors discussed in greater detail in our filings with the Securities and Exchange Commission (“SEC”), including in our Annual Report on Form 10-K for the year ended December 31, 2023. You are cautioned not to place undue reliance on such statements and to consult our SEC filings for additional risks and uncertainties that may apply to our business and the ownership of our securities. Our forward-looking statements are presented as of the date made, and we disclaim any duty to update such statements unless required by law to do so.
Investor Relations Contact:
Three Part Advisors, LLC
Joe Noyons
817.778.8424
Financial Tables Follow
| Quest Resource Holding Corporation and Subsidiaries STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share amounts) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenue | $ | 73,145 | $ | 74,497 | $ | 145,796 | $ | 148,611 | ||||||||
| Cost of revenue | 59,613 | 60,992 | 118,228 | 122,476 | ||||||||||||
| Gross profit | 13,532 | 13,505 | 27,568 | 26,135 | ||||||||||||
| Selling, general, and administrative | 9,386 | 9,213 | 19,184 | 18,630 | ||||||||||||
| Depreciation and amortization | 2,364 | 2,452 | 4,726 | 4,877 | ||||||||||||
| Total operating expenses | 11,750 | 11,665 | 23,910 | 23,507 | ||||||||||||
| Operating income | 1,782 | 1,840 | 3,658 | 2,628 | ||||||||||||
| Interest expense | (2,612 | ) | (2,556 | ) | (5,084 | ) | (4,999 | ) | ||||||||
| Loss before taxes | (830 | ) | (716 | ) | (1,426 | ) | (2,371 | ) | ||||||||
| Income tax expense | 684 | 171 | 743 | 540 | ||||||||||||
| Net loss | $ | (1,514 | ) | $ | (887 | ) | $ | (2,169 | ) | $ | (2,911 | ) | ||||
| Net loss applicable to common stockholders | $ | (1,514 | ) | $ | (887 | ) | $ | (2,169 | ) | $ | (2,911 | ) | ||||
| Net loss per common share: | ||||||||||||||||
| Basic | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.11 | ) | $ | (0.15 | ) | ||||
| Diluted | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.11 | ) | $ | (0.15 | ) | ||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic | 20,507 | 19,962 | 20,446 | 19,947 | ||||||||||||
| Diluted | 20,507 | 19,962 | 20,446 | 19,947 | ||||||||||||
| RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (Unaudited) (In thousands) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net loss | $ | (1,514 | ) | $ | (887 | ) | $ | (2,169 | ) | $ | (2,911 | ) | ||||
| Depreciation and amortization | 2,605 | 2,539 | 5,101 | 5,048 | ||||||||||||
| Interest expense | 2,612 | 2,556 | 5,084 | 4,999 | ||||||||||||
| Stock-based compensation expense | 363 | 363 | 720 | 661 | ||||||||||||
| Acquisition, integration, and related costs | 19 | 174 | 61 | 652 | ||||||||||||
| Other adjustments | 370 | 117 | 719 | 31 | ||||||||||||
| Income tax expense | 684 | 171 | 743 | 540 | ||||||||||||
| Adjusted EBITDA | $ | 5,139 | $ | 5,033 | $ | 10,259 | $ | 9,020 | ||||||||
| ADJUSTED NET INCOME PER SHARE (Unaudited) (In thousands) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Reported net loss (1) | $ | (1,514 | ) | $ | (887 | ) | $ | (2,169 | ) | $ | (2,911 | ) | ||||
| Amortization of intangibles (2) | 2,221 | 2,223 | 4,441 | 4,444 | ||||||||||||
| Acquisition, integration, and related costs (3) | 19 | 174 | 61 | 652 | ||||||||||||
| Other adjustments (4) | — | — | — | (76 | ) | |||||||||||
| Adjusted net income | $ | 726 | $ | 1,510 | $ | 2,333 | $ | 2,109 | ||||||||
| Diluted earnings (loss) per share: | ||||||||||||||||
| Reported net loss | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.11 | ) | $ | (0.15 | ) | ||||
| Adjusted net income | $ | 0.03 | $ | 0.07 | $ | 0.10 | $ | 0.10 | ||||||||
| Weighted average number of common shares outstanding: Diluted (5) | 22,974 | 22,037 | 22,777 | 22,101 | ||||||||||||
(1) Applicable to common stockholders
(2) Reflects the elimination of non-cash amortization of acquisition-related intangible assets
(3) Reflects the add back of acquisition/integration related transaction costs
(4) Reflects adjustments to earn-out fair value
(5) Reflects adjustment for dilution when adjusted net income is positive
| BALANCE SHEETS (In thousands, except per share amounts) | ||||||||
| June 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 958 | $ | 324 | ||||
| Accounts receivable, less allowance for doubtful accounts of | 62,461 | 58,147 | ||||||
| Prepaid expenses and other current assets | 2,575 | 2,142 | ||||||
| Total current assets | 65,994 | 60,613 | ||||||
| Goodwill | 85,828 | 85,828 | ||||||
| Intangible assets, net | 22,091 | 26,052 | ||||||
| Property and equipment, net, and other assets | 7,839 | 4,626 | ||||||
| Total assets | $ | 181,752 | $ | 177,119 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 41,426 | $ | 41,296 | ||||
| Other current liabilities | 1,766 | 2,470 | ||||||
| Current portion of notes payable | 1,159 | 1,159 | ||||||
| Total current liabilities | 44,351 | 44,925 | ||||||
| Notes payable, net | 70,749 | 64,638 | ||||||
| Other long-term liabilities | 1,057 | 1,275 | ||||||
| Total liabilities | 116,157 | 110,838 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, | — | — | ||||||
| Common stock, | 20 | 20 | ||||||
| Additional paid-in capital | 177,793 | 176,309 | ||||||
| Accumulated deficit | (112,218 | ) | (110,048 | ) | ||||
| Total stockholders’ equity | 65,595 | 66,281 | ||||||
| Total liabilities and stockholders’ equity | $ | 181,752 | $ | 177,119 | ||||
FAQ
What was Quest Resource Holding 's (QRHC) revenue for Q2 2024?
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What was Quest Resource Holding 's (QRHC) Adjusted EBITDA for Q2 2024?
How many new clients did QRHC onboard in the recent period?
What indexes was Quest Resource Holding (QRHC) added to recently?
