Key Highlights

  • Arq (NASDAQ:ARQ) flipped to third-quarter Net Income of USD 2.5 million from a USD 0.9 million loss, with Revenue up 9% to USD 38.2 million from USD 35.1 million.
  • Cost of revenue, measured before Depreciation and amortization, declined 8% to USD 23.0 million from USD 25.0 million, implying a Margin of about USD 15.2 million on that basis (calculated).
  • Adjusted EBITDA, a non-GAAP metric, climbed to USD 8.8 million from USD 5.2 million, and the nine-month Bottom Line moved to USD 0.6 million of profit from a USD 3.3 million loss.
  • Management no longer expects GAC Facility output in fiscal 2026 or 2027; cash on hand is USD 7.8 million, with another USD 11.3 million classed as restricted.

Powdered Carbon Growth Compensates for a Dormant Granular Line

The third-quarter 10-Q for Arq (NASDAQ:ARQ) was lodged on November 4, 2026. This environmental technology Business makes activated carbon for removing mercury, PFAS and other pollutants, selling into coal-fired generation, industrial operations, water treatment and remediation. About USD 3.8 million of the top-line increase reflected extra activated carbon volume, pushed by power generators and seasonal electricity usage. Average selling prices and a less favorable product blend subtracted USD 0.6 million and USD 0.2 million respectively. Cost of revenue dropped because the Corbin Facility has been idle since December 2025, and maintenance and contracted services were cheaper, though higher pay and utilities partly reversed that.

Design Limits Keep the Granular Carbon Plant Offline

In March 2026 Arq halted granular activated carbon work at its Red River Plant after tests revealed that the thermal oxidizer can process only around 15 million pounds annually, far below the 25 million pounds or more it was designed for. Management judges a stand-alone 15 million pound configuration economically unattractive and is still pursuing a lawsuit against the original engineering firm. Its optimization study is essentially finished, with the preferred layout, cost and schedule fixed, yet no GAC output is anticipated in 2026 or 2027, and Capital will be committed only when returns are compelling. Research and Development spend dropped 71% to USD 0.8 million because GAC testing has ended.

Bonus Accruals, Leadership Turnover and a 2027 PFAS Catalyst

SG&A increased 55% to USD 7.2 million, with Payroll and benefits at USD 2.9 million compared with USD 1.1 million, mostly because of incentive accruals, and legal and professional fees at USD 1.7 million. Executive exits have triggered severance, and the chief financial, operating and accounting officer roles are being reshuffled. Arq also highlighted EPA rules, effective from April 2027, requiring public water utilities to report PFAS readings, which it sees as a possible boost to Demand for its PFAS-targeted powdered carbon. Key risks cover seasonal power demand, Natural Gas prices and the stalled GAC ramp-up. The company gave no numeric guidance.

Where Things Stand

Yes, though the profit depends on seasonal demand. Arq (NASDAQ:ARQ) moved into profit as heavier powdered carbon volumes, idle-plant savings and the disappearance of GAC pre-production spending overcame higher SG&A. The improvement is real on paper, but it hinges on power-sector seasonality and sits alongside a granular business with no output expected in 2026 or 2027. Cash of USD 7.8 million is thin. Next checkpoints include the April 2027 PFAS reporting start, executive appointments and any decision to restart GAC investment.