On August 8, 2024, Quest Resource Holding Corp (QRHC, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. Quest Resource Holding Corp is a national provider of waste and recycling services to customers from across multiple industry sectors that are typically larger, multi-location businesses. The company creates customer-specific programs and performs the related services for the collection, processing, recycling, disposal, and tracking of waste streams and recyclables.
Performance Overview
Quest Resource Holding Corp (QRHC, Financial) reported a revenue of $73.1 million for Q2 2024, a 1.8% decrease compared to $74.5 million in Q2 2023. This figure fell short of the analyst estimate of $76.70 million. Despite the revenue decline, the company managed to maintain a gross profit of $13.5 million, consistent with the same period last year. The gross margin improved slightly to 18.5% from 18.1% in Q2 2023.
The company reported a GAAP net loss of $1.5 million, translating to a net loss per share of $(0.07), compared to a net loss of $0.9 million or $(0.04) per share in Q2 2023. This was worse than the analyst estimate of $(0.01) per share. Adjusted EBITDA showed a modest increase to $5.1 million from $5.0 million in the same period last year.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $73.1 million | $74.5 million |
| Gross Profit | $13.5 million | $13.5 million |
| Gross Margin | 18.5% | 18.1% |
| GAAP Net Loss | $(1.5) million | $(0.9) million |
| Net Loss per Share | $(0.07) | $(0.04) |
| Adjusted EBITDA | $5.1 million | $5.0 million |
Year-to-Date Performance
For the first half of 2024, Quest Resource Holding Corp (QRHC, Financial) reported a revenue of $145.8 million, a 1.9% decrease compared to $148.6 million in the same period of 2023. The gross profit for the period increased by 5.5% to $27.6 million, with a gross margin of 18.9%, up from 17.6% in the previous year. The GAAP net loss for the first half of 2024 was $2.2 million, an improvement from the $2.9 million loss reported in the same period of 2023. Adjusted EBITDA for the first half of 2024 was $10.3 million, a 13.7% increase from $9.0 million in the same period last year.
Strategic Wins and Client Expansion
Quest Resource Holding Corp (QRHC, Financial) has made significant strides in client acquisition and expansion. The company onboarded seven new clients and signed three expansion agreements with existing clients, each expected to generate seven figures in annual revenue. Additionally, a new client in the grocery vertical is anticipated to produce eight figures of annual revenue. These strategic wins are expected to drive future growth and solidify Quest's position in the market.
“I am incredibly proud of the positive reaction and feedback we have received from clients we are onboarding, one of which has already committed to expanding our engagement with additional services,” said S. Ray Hatch, President and Chief Executive Officer of Quest.
Financial Position
As of June 30, 2024, Quest Resource Holding Corp (QRHC, Financial) reported total assets of $181.8 million, up from $177.1 million at the end of 2023. The company's cash and cash equivalents stood at $958,000, while accounts receivable increased to $62.5 million from $58.1 million. Total liabilities were $116.2 million, compared to $110.8 million at the end of 2023. The company's stockholders' equity was $65.6 million, down slightly from $66.3 million at the end of 2023.
Conclusion
Despite facing challenges such as lower-than-expected production volumes from one of its largest clients, Quest Resource Holding Corp (QRHC, Financial) has demonstrated resilience through strategic client acquisitions and expansions. The company's focus on enhancing operational efficiency and client satisfaction positions it well for future growth. However, the revenue decline and increased net loss highlight the need for continued vigilance in managing operational challenges and market conditions.
Explore the complete 8-K earnings release (here) from Quest Resource Holding Corp for further details.
