Why Environment Tech Company Arq's Shares Are Surging Today

Arq Inc ARQ shares are surging after the company achieved positive net income for the first time in eight quarters.

The company reported fourth-quarter FY23 sales growth of 20% year-on-year to $28.104 million, beating the analyst consensus estimate of $27 million.

Gross margin for the quarter expanded by 2,440 basis points to 49.8%. The increase was driven by continued focus on profitability over volume, cost management, positive changes in product mix, and take-or-pay revenue.

Operating income was $3.1 million in the fourth quarter, compared to an operating loss of $(3.4) million last year. The operating margin was 11%.

Adjusted EBITDA was $7.2 million compared to an adjusted EBITDA loss of $(1.2) million a year ago.

The company held $45.4 million in cash and equivalents as of December 31, 2023.

The company reported a positive net income of $3.3 million in the quarter, reflecting the first positive net income quarter since the fourth quarter of 2021. EPS of $0.10 beat the consensus estimate of $(0.08).

“We delivered fourth quarter results that clearly evidence the improving profitability of our existing business,” said CEO Robert Rasmus.

Price Action: ARQ shares are trading higher by 40% at $4.859 on the last check Wednesday.