• Revenue: $25.1 million for 2024, at the lower end of guidance range ($25 million to $26 million).
• Cash and Investments: Approximately $30 million with no long-term debt.
• Fourth Quarter Revenue: $5.3 million, down from $6.3 million in Q4 2023.
• APC Segment Revenue: Declined to $1.8 million from $2.8 million in Q4 2023.
• FUEL CHEM Segment Revenue: Essentially unchanged at $3.5 million in Q4 2024.
• Gross Margin: Declined to 42% in Q4 2024 from 51% in Q4 2023.
• SG&A Expenses: Increased to $3.9 million in Q4 2024 from $3.7 million in Q4 2023.
• Net Loss: $1.9 million or $0.06 per share in Q4 2024, compared to $539,000 or $0.02 per share in Q4 2023.
• Adjusted EBITDA Loss: $1.8 million in Q4 2024, compared to $646,000 in Q4 2023.
• Backlog: $6.2 million at December 31, 2024, compared to $7.5 million at December 31, 2023.
• Operating Loss: $2.1 million in Q4 2024, compared to $801,000 in Q4 2023.
• Interest Income: $283,000 in Q4 2024 and $1.3 million for the full year 2024.
• Working Capital: $23.8 million or $0.77 per share as of December 31, 2024.
• Stockholders' Equity: $42 million or $1.37 per share as of December 31, 2024.

• Warning! GuruFocus has detected 3 Warning Signs with FTEK.

Release Date: March 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Fuel Tech Inc (NASDAQ:FTEK) ended 2024 with a strong financial position, holding approximately $30 million in cash, cash equivalents, and investments, with no long-term debt.
• The FUEL CHEM business segment is starting 2025 with its best performance in several years, driven by the return to full operation of base accounts and the addition of a new commercial account.
• Fuel Tech Inc (NASDAQ:FTEK) is pursuing new business opportunities, including a potential FUEL CHEM account in the Midwest and international expansion in Mexico.
• The company has a promising portfolio of APC business opportunities for 2025, both domestically and internationally, with recent awards totaling $1.6 million and expectations for an additional $4 million to $5 million in contracts.
• Fuel Tech Inc (NASDAQ:FTEK) is actively working on commercializing its DGI technology, with ongoing demonstrations and discussions in various end markets, including aquaculture and municipal wastewater treatment.

Negative Points

• Revenues for 2024 were at the lower end of guidance, impacted by delayed project execution and timing of air pollution control awards.
• Consolidated revenues declined in the fourth quarter of 2024 compared to the same period in 2023, with a notable decrease in the APC segment.
• Gross margins for both APC and FUEL CHEM segments declined in the fourth quarter of 2024, affecting overall profitability.
• Operating loss for 2024 increased compared to 2023, reflecting lower segment revenues and higher operating expenses.
• The company does not expect to reach operational income break-even at the projected $30 million revenue for 2025, indicating a need for higher revenues to achieve profitability.

Q & A Highlights

Q: Can you confirm if the $30 million revenue outlook for 2025 includes the additional FUEL CHEM customer and APC orders? A: Yes, the APC orders are included in the outlook. However, the new FUEL CHEM account is not expected to contribute significantly to 2025 revenues. The primary driver for revenue growth in FUEL CHEM is the return to full operation of base accounts and contributions from a new account added in 2024. - Vincent Arnone, CEO

Q: How do extended plant outages impact FUEL CHEM revenues? A: It's challenging to predict unplanned outages. We are informed of planned outages, which occur during low power demand periods, and can plan for those. Unplanned outages due to equipment issues are unpredictable and not factored into forecasts. - Vincent Arnone, CEO

Q: Should we expect better gross margins in 2025 given the higher revenue expectations? A: For FUEL CHEM, we expect margins to return to historical levels of 49-50% as unplanned outages impacted 2024 margins. For APC, margins depend on product mix and ancillary revenues, expected to be in the 35-38% range. - Vincent Arnone, CEO

Q: What is the expected trend for R&D expenses in 2025? A: R&D expenses for 2025 are expected to be similar to 2024, with no extraordinary increases anticipated. SG&A expenses will see a small increase but nothing material. - Vincent Arnone, CEO

Q: Can you elaborate on the data center opportunities and how Fuel Tech plans to capture this business? A: Data centers are a significant opportunity due to the need for nitrogen oxide controls on natural gas turbines used for primary power. We are actively bidding on projects and leveraging past experience to expedite response times and capitalize on synergies. - Vincent Arnone, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.