Birchtech Q2 FY26 earnings call BCHT

Birchtech announced the dismissal of all remaining Inter Partes Review (IPR) challenges to its patents, validating its patented SEA technologies after seven years of enforcement. This outcome has resulted in approximately $37 million in license fees and settlements received to date. The company also maintains a $78 million-plus final judgment from the U.S. District Court, which is currently under appeal, with post-judgment interest accruing daily.

The SEA platform remains the cornerstone of the company's air business, with Q2 revenues totaling $3.4 million, primarily from product supply. The company's strategy focuses on converting utility licensees, initially targeted for patent enforcement, into ongoing product supply customers. The air segment is positioned as a self-funding growth engine, generating capital and market credibility to invest in the water business.

Birchtech is actively building its commercial foundation in the water market, exhibiting at major industry conferences and establishing design centers. The company launched its SEA-IX nuclear-grade ion exchange rosin line in March and recently expanded its product portfolio with two additional lines targeting boron and heavy metals removal. These efforts are aimed at addressing the growing needs of customers with wastewater concerns, particularly for PFAS removal.

Significant progress has been made in developing innovative thermal reactive technologies for carbon rejuvenation. The company's thermally rejuvenated granular activated carbon has demonstrated comparable performance to virgin carbon for PFAS removal, offering a breakthrough that could dramatically lower lifecycle costs for utilities. Birchtech is working to establish carbon rejuvenation capacity and expects to provide further updates soon.

Total revenues for Q2 FY26 were $3.8 million, up from $3.3 million in the prior year, driven by increased air business demand and initial water treatment sales. Gross profit remained flat at $1 million due to a shift away from higher-margin licensing revenues. SG&A expenses increased to $2.1 million, primarily due to higher legal fees and public company costs, contributing to a net loss of $3 million and an adjusted EBITDA loss of $1.9 million.

Birchtech ended Q2 FY26 with a strong cash balance of $11.8 million and no debt, a significant increase from $2.2 million at the end of FY25. The company highlighted a $7.3 million profit share liability that is contingent upon the collection of the $78 million-plus final judgment, underscoring the potential future financial impact of the ongoing legal process.

The company announced key leadership changes, with Mike Mioska joining as Chief Financial Officer in May and Jim Treadle being promoted to Chief Operating Officer. Mr. Treadle, with extensive experience in dry bulk material handling, is expected to play a critical role in scaling both the air and clean water platforms, particularly in commercializing carbon rejuvenation.