Fuel Tech, Inc. Q1 FY2026 earnings call

Vince Arnone mentioned first quarter results were strong but fell slightly short of last year's Q1. APC business segment had improved performance with new $10 million contracts, including a major one with a Midwest municipal utility for SCR technology integration with GE Vernova turbines. Fuel chem segment had solid revenue but with a demonstration interruption. DGI continued technology demos with positive results. Also discussed regulatory impacts and future outlook for APC and Fuel chem segments.

Consolidated revenues declined to $6.1 million from $6.4 million in the prior year period. APC segment revenue rose 23% to $1.6 million from $1.3 million, with segment margin expanding to 38.3% (nearly 600 basis points from prior year). Fuel chem segment revenue declined to $4.5 million from $5.1 million, with segment margin at 45.3% compared to 49.9% in prior year first quarter.

Management expects 2026 revenues to exceed 2025, with APC exceeding 2025 performance and FuelChem approximating 2025 revenues. New APC contracts doubled pro forma backlog to ~$17 million. Data center sales pipeline remains strong at $75 - $100 million. SG&A expenses expected to range $14 - $15 million in 2026.

Risks include factors discussed in FuelTech's annual report on Form 10-K, such as risks related to forward-looking statements, potential differences between actual results and forward-looking statements, state-specific permitting requirements differing from federal regulations, and uncertainties in data center award timings and conversions.

First question from Sameer Joshi on regulatory retrofit opportunities for old plants and efforts towards it. Second question from William Bremmer on sales personnel and insider purchases. Answers included discussion on retrofit opportunities in power generation, sales process for recent contracts, and comments on insider purchases and potential team changes.