Quest Resource Holding Corporation Q4 FY2025 earnings call

• Soft volume environment continues, with industrial and some retail/restaurant volumes down. No lost industrial customers, but new business pipeline elongated. Saw better new business wins in second half of 2025. - Focused on operational excellence initiatives, progress on share wallet with existing customers, broadening waste streams and adding services for clients. Example of adding new locations for automotive customer. - Onboarding wins from past 18 months progressing, initial volumes from new wins lower margin due to startup costs. - Operating platform advancements to improve customer experience and service disruption rates. Portal provides visibility, zero-touch capability drives efficiencies. - 2025 saw $29 million new revenue from client wins, wallet share expansion, etc., with strong operating foundation and resilient team

Fourth quarter revenue was $58.9 million, a 16% decrease from one year ago and 7% sequentially. Gross profit was $9.1 million, a 15% year-over-year and 21% sequential decline, with a gross margin of 15.5%. SG&A was $7.7 million, a 24% year-over-year and 17% sequential reduction. Cash at end of quarter was $1 million, with $37.7 million available borrowing capacity. Paid down ~$2 million in debt during quarter, with full-year reduction of $13.2 million. Remaining two-thirds of business saw ~$7.4 million or 5% growth excluding industrial and divestiture impacts

• Outlook for Q1 gross profit dollars expected to improve due to slightly improved volume, execution of initiatives, and contributions from Q4 launches. - Anticipate some margin pressure in 2026 from challenged industrial volume and land and expand strategy, but expect to offset via optimizing service levels, growing wallet share, etc. - SG&A expected below $9 million in Q1, with sequential increase due to normal bonus accrual. - Expect annualized cost savings of ~$400,000 in 2026 from office space sublet and new lease. - Continue to aggressively reduce debt as cash generation improves. - Refinanced ABL and negotiated covenant easements for flexibility

• Soft manufacturing and industrial output environments weighing on volumes from industrial customers. - Economic uncertainty leading to decision delays in new business pipeline. - One-time costs and initial lower margins from new clients and wallet share launches impacting gross profit in short term. - Dependence on industrial sector recovery for improved financial performance

Q: Please give an update on KPIs implemented, what's going better versus plan and lessons learned.

A: KPIs and operational efficiency initiatives on track, business performing well in volume environment. All KPI trending positive, but masked by disappointing volume.

Q: Update on health of vendor network.

A: Vendors asking for business again, relationships improved, project to lower cost delivered results, vendors now paying to term, lowest service disruptions in history with associated costs at historic lows.

Q: Elaborate on cross-sell opportunities with industrial customers.

A: Can't cite specific customers, but healthy relationships with industrials, stand to benefit if industrial base improves by adding plants or increasing production