Key Highlights

  • Arq (NASDAQ:ARQ) reported third-quarter Net Income of USD 2.5 million against a net loss of USD 0.9 million a year earlier, as Revenue rose 9% to USD 38.2 million from USD 35.1 million.
  • Cost of revenue, excluding Depreciation and amortization, fell 8% to USD 23.0 million from USD 25.0 million, lifting the calculated Margin on that basis to about USD 15.2 million.
  • Adjusted EBITDA, a non-GAAP measure, rose to USD 8.8 million from USD 5.2 million, while nine-month net income was USD 0.6 million against a loss of USD 3.3 million.
  • The company does not expect production at its GAC Facility in fiscal 2026 or 2027, and cash on hand was USD 7.8 million, excluding USD 11.3 million of restricted cash.

Powdered Carbon Demand Offsets an Idled Granular Plant

Arq (NASDAQ:ARQ) filed its third-quarter 10-Q on November 4, 2026. The environmental technology company sells activated carbon used to remove mercury, PFAS and other contaminants for coal-fired power, industrial, water treatment and remediation customers. Revenue growth came mainly from about USD 3.8 million of extra Volume of activated carbon products, driven by power-generation customers and seasonal electricity demand. Lower average selling prices and a weaker mix offset USD 0.6 million and USD 0.2 million of the gain. Cost of revenue fell because the Corbin Facility has been idled since December 2025 and maintenance and outside service costs were lower, partly offset by higher wages and utilities.

GAC Facility Design Flaws Keep Granular Production Off Through 2027

The company paused granular activated carbon production at its Red River Plant in March 2026 after testing showed the thermal oxidizer supports only about 15 million pounds a year, versus a design capacity of 25 million pounds or more. It says a stand-alone 15 million pound scenario is not economically attractive, and litigation against the original engineering firm continues. The optimization review is effectively complete, and the preferred design, cost and timing have been set, but the company does not expect GAC production in 2026 or 2027, and it will invest further only when returns are attractive. Research and Development expense fell 71% to USD 0.8 million as GAC testing costs did not recur.

Higher Incentive Pay, Executive Severance and PFAS Rules

Selling, general and administrative expense rose 55% to USD 7.2 million, led by Payroll and benefits of USD 2.9 million versus USD 1.1 million on incentive accruals, and by legal and professional fees of USD 1.7 million. The filing cites severance linked to executive departures, with the chief financial officer, chief operating officer and chief accounting officer roles in transition. Arq (NASDAQ:ARQ) points to EPA rules requiring public water systems to report PFAS levels from April 2027 as a potential demand driver for its powdered carbon for PFAS product. Risks include seasonal power demand, Natural Gas prices and the unresolved GAC ramp-up. No numeric guidance was given.

Where Things Stand

Arq (NASDAQ:ARQ) swung to profit because stronger powdered carbon volumes, savings from the idled Corbin Facility and the absence of GAC pre-production costs outweighed higher selling and administrative expense. The turnaround is real in the numbers, though it depends on seasonal power demand and does not include granular carbon, which is not expected in 2026 or 2027. Cash on hand is modest at USD 7.8 million. Next markers are PFAS rule timing in April 2027, executive appointments and any decision to resume GAC investment.