8-K: Quest Resource Holding Corp. Q2 2026 Results: Revenue Up, Net Loss Widens

Quest Resource Holding Corporation reported Q2 2026 results with revenue increasing 7.6% year-over-year to $64.1 million, but a substantial goodwill impairment charge led to a net loss of $12.2 million.

Summary

• Quest Resource Holding Corporation announced its financial results for the second quarter ended June 30, 2026.
• Revenue for the quarter was $64.1 million, a 7.6% increase compared to $59.5 million in Q2 2025 and a 3.8% increase from Q1 2026.
• Gross profit decreased by 5.5% to $10.4 million compared to $11.0 million in Q2 2025, resulting in a gross margin of 16.3% (down from 18.5% in Q2 2025).
• A significant non-cash goodwill impairment loss of $11.0 million contributed to a GAAP net loss of $12.2 million ($0.57 per share), compared to a net loss of $2.0 million ($0.09 per share) in Q2 2025.
• Adjusted EBITDA was $2.8 million, an increase from $2.7 million in Q2 2025 and $1.8 million in Q1 2026.
• The company secured four new share-of-wallet wins, including a significant one with a national automotive parts retailer.
• Productivity initiatives led to an 11% reduction in SG&A expenses year-over-year.
• Strong operating cash flow of $4.5 million was generated, which was used to voluntarily reduce $2.0 million of term debt.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a mixed result, with revenue and Adjusted EBITDA growth offset by a significant net loss due to a goodwill impairment charge.

Positives

• Revenue increased by 7.6% to $64.1 million compared to the prior year period.
• Secured four new share-of-wallet wins, including a significant deal with a large national automotive parts retailer.
• Successfully launched a large franchisee customer in the quick-service restaurant industry.
• Productivity initiatives and cost optimization drove an 11% reduction in SG&A expenses year-over-year.
• Generated strong operating cash flow of $4.5 million.
• Voluntarily reduced $2.0 million of term debt, contributing to a year-to-date debt reduction of $4.0 million.
• Adjusted EBITDA increased to $2.8 million from $2.7 million in Q2 2025 and $1.8 million in Q1 2026.
• Gross profit increased sequentially by 7.9% from Q1 2026.

Negatives

• Gross profit decreased by 5.5% to $10.4 million compared to Q2 2025.
• Gross margin declined to 16.3% from 18.5% in the prior year period.
• Reported a GAAP net loss of $12.2 million, a significant increase from the $2.0 million net loss in Q2 2025.
• The net loss per share was $(0.57), compared to $(0.09) in Q2 2025.
• A substantial non-cash goodwill impairment loss of $11.0 million was recorded.

Risks

• Competition in the environmental services industry.
• The impact of the current economic environment.
• Interruptions to supply chains.
• Commodity price fluctuations.
• Extended shut down of businesses.

Future Outlook

The sales pipeline remains healthy, and the company anticipates a gradually improving operating landscape. Management expects to deliver improved financial results as conditions normalize, driven by continued focus on operational excellence and cost optimization.

Management Comments

• "We returned to top-line and Adjusted EBITDA growth during the second quarter, both sequentially and compared to the prior year, supported by the growing contributions of recent customer wins and wallet share expansions, stabilizing volumes from our Industrial customers and achieved ongoing efficiencies across the business," said Perry W. Moss, Quest's Chief Executive Officer.
• "Looking ahead, our sales pipeline remains healthy, and we are encouraged by what appears to be a gradually improving operating landscape. We remain focused on executing our Operational Excellence initiatives to drive productivity enhancements and expect to deliver improved financial results as conditions normalize."
• "Recent customer wins and wallet share expansions delivered more meaningful margin contributions in the second quarter as the one-time start-up costs subsided late in the first quarter. Combined with our continued focus on SG&A reduction and cost optimization, which drove 100% flow through of our gross profit gains, we achieved strong sequential Adjusted EBITDA growth. These, combined with further progress on our working capital initiatives, helped generate strong operating cash flow of $4.5 million, which facilitated the reduction of our term loan balance by another $2.0 million. Our financial focus remains on cost optimization, debt reduction, and the ongoing improvement of our cash cycle," added Brett Johnston, Quest's Chief Financial Officer.

Industry Context

StockSavvy.ai notes that Quest Resource Holding Corporation operates in the environmental waste and recycling services sector. The reported revenue growth aligns with a general trend of increased focus on sustainability and environmental responsibility among businesses, which can drive demand for such services. However, the company's challenges with gross margin and net loss, despite revenue increases, highlight the competitive pressures and operational complexities within the industry.

Comparison to Industry Standards

• No specific industry benchmarks or competitor comparisons were provided in the filing.
• The filing does not offer direct comparisons to industry-standard gross margins or net loss figures for waste and recycling service providers.

Stakeholder Impact

• Shareholders: The significant net loss and goodwill impairment may negatively impact investor sentiment, although revenue and Adjusted EBITDA growth are positive indicators.
• Creditors: The voluntary reduction of $2.0 million in term debt is a positive step towards deleveraging, potentially improving the company's credit profile.
• Customers: The company highlights new customer wins and expanded wallet share, indicating continued customer engagement and service delivery.

Next Steps

• Continue executing Operational Excellence initiatives to drive productivity enhancements.
• Focus on cost optimization, debt reduction, and improving cash cycle.
• Deliver improved financial results as operating conditions normalize.
• Host conference call on August 6, 2026, to review financial results.

Key Dates

Recommendation

The company shows positive trends in revenue and Adjusted EBITDA, along with debt reduction efforts. However, the substantial net loss due to a goodwill impairment charge and declining gross margins warrant a cautious approach. A 'hold' recommendation reflects the mixed signals, suggesting investors should await further evidence of sustained profitability and margin improvement before considering a buy.

Keywords

waste management, recycling services, environmental services, financial results, revenue growth, cost optimization, debt reduction, Adjusted EBITDA