Hudson Technologies, Inc. Q3 FY2025 earnings call

• Leadership Transition: Brian Coleman stepped down as Chairman and CEO, and the board is in the final stages of hiring a new CEO. Brian Bertaux is interim CEO. - Third Quarter Results: 20% revenue growth, 32% gross margin, and 59% increase in net income to $12.4 million. - Supply Chain Expansion: Expanding strategic supply chain of aftermarket refrigerants through outreach campaigns. - EPA Proposals: EPA proposals under review may extend compliance dates for equipment transitions, which may slightly advantage Hudson. - Sales and Marketing: Increased sales volume in Q3 due to warmer temperatures, and progress in promoting recovery and reclamation activities. - Financial Results Breakdown: Revenue of $74M, gross profit of $23.7M, SG&A expenses up due to staffing additions, operating income doubled to $14M, net income $12.4M or $0.27 per share.

In the third quarter of 2025, Hudson Technologies recorded $74 million in revenue, representing a 20% increase. The gross margin was 32%, and net income was $12.4 million, a 59% increase. Revenue growth was driven by increased sales volume and higher average sales prices of refrigerants. The refrigerant segment contributed significantly, with sales volume increasing as temperatures warmed and cooling systems were activated. The revenue contribution of the refrigerant segment was substantial, though specific percentage breakdown isn't explicitly stated but was the main driver of growth.

• Maintained expectation of slightly above mid-20% gross margin for full year 2025. - Expected pricing for next year to be consistent with this year on average, though market volatility makes it uncertain. - Government shutdown has had a near-term impact on the fourth quarter, but hopefully temporary.

• Market Volatility: Uncertainty in refrigerant pricing due to market volatility. - Government Shutdown: Near-term impact on the fourth quarter business. - EPA Regulatory Changes: Potential changes to regulations could impact the business, though proposed rule may slightly advantage Hudson.

Q: Gerry Sweeney asked about alternative skill sets for the new CEO and HFC pricing outlook.

A: Eric Prouty said new CEO likely needs acquisition and organic growth experience. Brian Bertaux said HFC pricing next year expected to be consistent on average but uncertain.

Q: Ryan Sigdahl asked about EPA data impact on strategy, DLA contract, and A2Ls.

A: Vincent Abbatecola said M&A to reduce gas market exposure. Brian Bertaux said DLA contract expected consistent, government shutdown has near-term impact. Kathleen Houghton said A2Ls are a growing part of the business.

Q: Matthew Maus asked about Q3 beat drivers and inventory.

A: Brian Bertaux said volume drove Q3 beat, USA Refrigerants had consistent contribution. Brian Bertaux said 2025 shows normalized working capital with $25M operating cash flow.

Q: Andrew Steinhardt asked about inorganic growth and distribution centers.

A: Kathleen Houghton said interested in service businesses to reduce seasonal impact. Brian Bertaux said not going into detail on distribution centers but looking to optimize $90M for strategic initiatives