8-K: Quest Resource Holding Corp Q1 2026 Financial Results

Quest Resource Holding Corporation announced Q1 2026 financial results, showing a 4.8% sequential revenue increase and a 6.1% gross profit increase, alongside a reduced net loss and improved Adjusted EBITDA compared to the prior year.

Summary

• Quest Resource Holding Corporation reported Q1 2026 revenue of $61.7 million, a 9.8% decrease year-over-year but a 4.8% increase from Q4 2025.
• Gross profit for Q1 2026 was $9.7 million, down 11.6% year-over-year but up 6.1% sequentially.
• Gross margin was 15.7%, slightly down from 16.0% in Q1 2025 but up from 15.5% in Q4 2025.
• The company reported a GAAP net loss of $2.3 million, an improvement from a $10.4 million net loss in Q1 2025.
• GAAP net loss per share was $(0.11), compared to $(0.50) in Q1 2025.
• Adjusted EBITDA was $1.8 million, an increase from $1.6 million in Q1 2025, but a decrease from $2.1 million in Q4 2025.
• SG&A expenses were reduced by approximately 26% year-over-year.
• The company refinanced its ABL credit facility and used it to pay down $2.0 million of higher-rate term debt.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a cautiously optimistic report, with clear sequential improvements and cost controls offsetting year-over-year declines due to macroeconomic factors. The debt reduction and new customer wins are positive indicators.

Positives

• Sequential revenue growth of 4.8% from Q4 2025 to $61.7 million.
• Sequential gross profit growth of 6.1% from Q4 2025 to $9.7 million.
• Improved GAAP net loss of $2.3 million in Q1 2026 compared to $10.4 million in Q1 2025.
• Increased Adjusted EBITDA to $1.8 million in Q1 2026 from $1.6 million in Q1 2025.
• Significant year-over-year reduction in SG&A expenses by approximately 26%.
• Successful onboarding of new customer wins and wallet share expansions.
• Refinancing of ABL credit facility to pay down $2.0 million of higher-rate term debt, reducing interest expense.
• Signed a new contract with a large quick-service restaurant franchisee.

Negatives

• Revenue decreased by 9.8% year-over-year to $61.7 million.
• Gross profit decreased by 11.6% year-over-year to $9.7 million.
• Gross margin slightly decreased to 15.7% from 16.0% in the prior year quarter.
• Adjusted EBITDA decreased sequentially from $2.1 million in Q4 2025 to $1.8 million in Q1 2026.
• Continued GAAP net loss of $2.3 million.

Risks

• Competition in the environmental services industry.
• Impact of the current economic environment.
• Interruptions to supply chains.
• Commodity price fluctuations.
• Extended shutdown of businesses.

Future Outlook

The company expects to execute similar voluntary debt paydowns as macroeconomic conditions improve and provide incremental visibility. These measures, along with a focus on continuous improvement, are anticipated to enhance the cash cycle, strengthen the balance sheet, and provide incremental financial flexibility.

Management Comments

• "Throughout the first quarter, we experienced steady improvement, which is consistent with the seasonal acceleration."
• "Importantly, recent new customer wins and wallet share expansions with existing customers that we secured during the latter half of 2025 are now fully onboarded and finished the first quarter as full contributors to our results."
• "Our sales pipeline also remains healthy as we continue to advance meaningful opportunities for both new sales and wallet share expansions."
• "Overall, the operating environment remains difficult, though we are cautiously optimistic given improvements achieved in the quarter, and we remain acutely focused on elements within our control."
• "Our financial strategy remains focused on managing our cost structure, leveraging our Operational Excellence initiatives to drive cash flow, and paying down debt."
• "We've demonstrated a firm grasp on our operating cost structure, reducing SG&A in the first quarter by roughly 26% compared to the same quarter in the prior year and lower than the guidance provided last quarter."
• "We simultaneously continue to seek ways to elevate our billing and collection practices, optimizing working capital and improving our cash conversion cycle in the process."
• "Lastly, the recent refinancing of our ABL credit facility allowed us to immediately swap $2.0 million of term debt for ABL debt, reducing our interest expense, which we expect will free up additional cash to allocate toward additional debt paydown."

Industry Context

StockSavvy.ai notes that Quest Resource Holding Corporation's Q1 2026 results reflect a challenging but improving operating environment within the environmental waste and recycling services sector. The sequential growth indicates a recovery from seasonal lows, while the year-over-year decline highlights ongoing macroeconomic pressures impacting the industry.

Comparison to Industry Standards

• No specific comparable companies or projects were mentioned in the filing for direct comparison.
• The filing does not provide global benchmarks for Q1 2026 performance in the waste and recycling sector.

Stakeholder Impact

• Shareholders: Potential for improved financial flexibility and balance sheet strength through debt reduction and operational improvements.
• Creditors: Positive impact from debt paydown and improved cash flow management.
• Employees: Continued focus on operational efficiency may lead to a more stable work environment.
• Customers: Onboarding of new customer wins and wallet share expansions indicates continued service delivery and potential for enhanced sustainability solutions.

Next Steps

• Continue to focus on managing cost structure and leveraging Operational Excellence initiatives.
• Seek ways to elevate billing and collection practices to optimize working capital.
• Allocate freed-up cash from reduced interest expense toward additional debt paydown.
• Anticipate executing similar voluntary debt paydowns as macroeconomic conditions improve.
• Host a conference call on May 7, 2026, at 5:00 PM ET to review Q1 2026 financial results.

Key Dates

Recommendation

The company shows sequential improvement and effective cost management, which are positive signs. However, the year-over-year revenue and profit declines, coupled with ongoing macroeconomic challenges, warrant a cautious approach. A 'hold' recommendation reflects the balance between current operational improvements and the external economic uncertainties.

Keywords

Quest Resource Holding Corporation, QRHC, Q1 2026 Earnings, Financial Results, Waste Management, Recycling Services, Environmental Services, Adjusted EBITDA