FUEL TECH, INC. Q1 FY2025 earnings call

FUEL CHEM - Began 2025 with best first quarter in over 10 years, revenues up 92% due to base accounts returning and new commercial account. Pursuing TIFI demonstration in third quarter at Midwest coal-fired unit and expanding in Mexico. ### APC - Revenues down due to project timing, but backlog up 66% as of March 31st. Working on datacenter opportunities using SCR and ULTRA technologies. Monitoring EPA rules, with final rule for large municipal waste combustor units delayed to December 2025. ### DGI - Demonstration to start soon at fish hatchery, deployed equipment there. Working with reps to sell DGI into multiple end markets like pulp and paper, food and beverage, etc.

For the first quarter of 2025, consolidated revenues rose 29% to $6.4 million. The FUEL CHEM business segment saw revenues increase by 92% to $5.1 million, comprising nearly 80% of total revenues. The APC business segment had revenues decline to $1.3 million from $2.3 million in the prior year period, but APC backlog at March 31st, 2025 was $10.3 million, a 66% increase from December 31st, 2024.

Maintaining revenue guidance for 2025 at approximately $30 million, with both business segments expected to exceed their 2024 performance. This base case outlook excludes material revenue contributions from DGI, significant contributions from APC due to new regulations or large datacenter contract awards, and impact from new major FUEL CHEM business development activities.

Various risks including market uncertainties, regulatory changes that could impact business opportunities, supply chain issues, and uncertainties related to the political environment affecting business expansion and revenue generation.

Q: Any update on how positioned to deal with market uncertainties and regulations?

A: Not completely sheltered, but general business expansion and power generation needs are market drivers. No preconceived ideas of new regulations boosting, but business expansion is a driver.

Q: Color on datacenter opportunity, names partnering with?

A: Working with OEM suppliers of gas turbines/engines and large tech companies building datacenters. Opportunities can be large with multiples of units, $1-2 million per unit.

Q: Mexico opportunity catalyst?

A: Mexican government needs to allow funds for pollution remediation systems. Hoping environmental needs become more top of mind.

Q: Datacenter opportunity beyond current administration?

A: Opportunities not necessarily driven by new regulation, assuming current EPA regulations stay in place.

Q: DGI sales entities, color on them?

A: Hired representatives for different end markets/geographies to access market channels, expertise needed for DGI sales.

Q: DGI show reception?

A: Well received at Aquaculture America show, got multiple leads in aquaculture.

Q: DGI and production timing?

A: Focus on supply chain management, risk control during project execution.

Q: Stock buyback thoughts?

A: Believe positive momentum can drive stock price better than using cash for buyback currently.