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    LIQT
    Earnings call· Jun 2026(Q2 FY26)

    LIQTECH INTERNATIONAL Q2 FY26 earnings call LIQT

    Aug 12, 2026 Source

    Executive summary

    LiqTech Q2 FY26 — Record Commercial Pool Revenue Offset by Water for Energy Project Delay

    LiqTech reported mixed Q2 FY26 results, with strong performance in Commercial Pool and Marine segments, alongside significant balance sheet strengthening from a recent public offering. However, a major Water for Energy project delay led to a downward revision of full-year revenue guidance. The company is now accelerating its strategic shift towards more predictable, repeatable solutions in Commercial Pool and targeted industrial wastewater applications to drive sustainable profitability.

    Highlights

    5

    • Commercial Pool revenue reached a record $1.5 million, up from $0.8 million in Q2 FY25.

    • Marine revenue increased to $0.7 million from $0.4 million in Q2 FY25.

    • Secured a $2.1 million follow-on order from a U.S.-based steel manufacturer for 4 additional systems, with 75% expected delivery by end of 2026.

    • Completed an underwritten public offering generating approximately $18 million in net proceeds, significantly strengthening the balance sheet with $15.7 million cash on hand.

    • Received a new order from a U.S. customer for a QureFlow QF-6 ceramic membrane filtration system for industrial wastewater treatment.

    Concerns

    5

    • Revised full-year 2026 revenue guidance down to $20 million to $23 million due to a delay in a major Water for Energy project.

    • Total revenue for Q2 FY26 decreased 12% year-over-year to $4.4 million from $5 million.

    • Gross margin declined to 8.4% ($0.4 million) in Q2 FY26 from 9.8% ($0.5 million) in Q2 FY25.

    • Net loss for Q2 FY26 increased to $3.1 million compared to $2.2 million in Q2 FY25.

    • Adjusted EBITDA was negative $1.6 million, a decline from negative $1.3 million in Q2 FY25.

    Guidance & targets

    1
    CategoryTargetConfidence
    Full-year Revenue
    $20 million to $23 million
    high materiality
    High

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Commercial Pool
    Strongest area of business, reflecting work to standardize the QlariFlow platform, strengthen distribution partnerships, and establish a broader base of reference installations.
    QlariFlow platform standardizeddistribution partnerships strengthenedfirst U.S. commercial pool project in Worland, Wyominglarge pool system in Den Helder, Netherlands, operating successfully
    		$1.5 millionrecord (from $0.8 million)——
    Marine
    Continued execution, reestablishing a stronger position in Marine by combining LiqTech's membrane technology with localized engineering, sourcing, assembly, and service through the China joint venture.
    factory acceptance test approval for the first 2 iCER dual-fuel water treatment unitsexpect to deliver 1 additional iCER dual-fuel water treatment unit and 2 marine scrubber water treatment systems in the third quartersecured a commercial order of 4 water treatment systems for EGR-equipped vessels in China with the first system currently expected to be delivered in December
    		$0.7 millionup from $0.4 million——
    Water for Industry
    Near-term opportunity set is becoming increasingly tangible, particularly in steel and other industry wastewater applications, demonstrating progress in customer relationships and technology validation.
    $2.1 million follow-on order from a U.S.-based steel manufacturer for 4 additional industry wastewater filtration systemsnew U.S. customer for a QureFlow QF-6 ceramic membrane filtration system to be installed at its new facility in Freeport, Texas
    		————
    DPF and Membrane
    Decrease primarily reflected temporary production delays caused by constrained availability of critical raw material.
    		$1 milliondecrease from $1.3 million——
    Plastics
    Customer purchasing decisions slowed during the quarter due to raw material prices and broader market uncertainty.
    		$0.9 milliondecrease from $1.2 million——

    Operational metrics

    14
    Net Proceeds from Public Offering
    $18 million
    Q2 FY26

    Generated approximately $18 million in net proceeds from an underwritten public offering.

    Cash on Hand (including restricted cash)
    $15.7 millioncompared with $2.7 million at the end of the first quarter
    as of June 30

    Ended the second quarter with a substantially stronger liquidity position.

    Total Revenue
    $4.4 milliondecreased 12% year-over-year from $5 million
    Q2 FY26

    Included strong year-over-year growth in Commercial Pools and Marine, offset by lower Water for Energy activity, temporary production constraints in DPF and membranes, and softer customer purchasing in plastics.

    Gross Profit
    $0.4 millioncompared with $0.5 million in Q2 FY25
    Q2 FY26

    Year-over-year decline primarily reflected product mix, lower contribution from higher-value system activity, and lower utilization of manufacturing capacity.

    Gross Margin
    8.4%compared with 9.8% in Q2 FY25
    Q2 FY26

    Improving gross margins depends on both revenue scale and mix.

    Total Operating Expenses
    $2.7 millionincreased 4% compared with $2.6 million in Q2 FY25
    Q2 FY26

    Managed with discipline while directing investments towards commercial growth and repeatable system platforms.

    Selling Expenses
    $0.8 millioncompared with $0.8 million in Q2 FY25
    Q2 FY26

    Increase primarily reflected annualized impact of hires within the Chinese joint venture, continued investments in sales coverage in the U.S. and Europe, and annualized cost for the U.S. service center.

    General and Administrative Expenses
    $1.6 millioncompared with $1.5 million in Q2 FY25
    Q2 FY26

    Adjusting for currency movements, G&A remained stable and below general inflation as the cost of filling open positions were offset by savings in other overhead areas.

    Research and Development Expenses
    $0.3 millioncompared with $0.2 million in Q2 FY25
    Q2 FY26

    Increase primarily related to membrane development and development work for Marine and Commercial Pool systems.

    Other Expenses
    $0.7 millioncompared with approximately $0.1 million in Q2 FY25
    Q2 FY26

    Increase primarily attributable to amortization of debt discount accrued and paid interest on the senior promissory notes and losses on foreign currency translation.

    Net Loss
    $3.1 millioncompared with a net loss of $2.2 million in Q2 FY25
    Q2 FY26

    Increased due to lower revenue and gross profit and currency-driven increase on operating expenses.

    Adjusted EBITDA
    -$1.6 millioncompared with a negative $1.3 million in Q2 FY25
    Q2 FY26

    Slight decline was due to the lower revenue and gross profit and currency-driven increase on operating expenses.

    Steel Manufacturer Order Delivery Expectation
    $2.1 million
    FY26

    This order builds directly on the successful deployment of the customer's initial system.

    Steel Manufacturer Initial System Operation Duration
    10 months
    as of Q2 FY26

    The initial system has been running very stable for 10 months, leading to the follow-on order.

    Industry KPIs

    1
    MetricValueDetails
    Industry production market size forecasts600 boats and vesselsunits

    Deals & partnerships

    4
    Public investorsUnderwritten public offering of common stock$18 million net proceeds

    The offering closed on June 8 and generated approximately $18 million in net proceeds.

    Local partners in ChinaJoint venture for Marine segment operations

    The China joint venture has allowed us to reestablish a stronger position in Marine by combining LiqTech's membrane technology with localized engineering, sourcing, assembly and service.

    U.S.-based steel manufacturerFollow-on order for 4 additional industry wastewater filtration systems$2.1 million

    Announced a $2.1 million follow-on order from a U.S.-based steel manufacturer for 4 additional industry wastewater filtration systems.

    New U.S. customerOrder for a QureFlow QF-6 ceramic membrane filtration system for industrial wastewater treatment

    Announced an order from a new U.S. customer for a QureFlow QF-6 ceramic membrane filtration system to be installed at its new facility in Freeport, Texas.

    Risks & headwinds

    4
    Water for Energy Project Delayremainder of 2026

    reduced our revenue visibility for the remainder of 2026; no longer prudent to maintain our previous full year revenue guidance

    Mitigation: putting greater emphasis and resources behind the markets where we see more repeatable demand, shorter sales cycles and a better revenue visibility; continue to pursue significant opportunities in Water of Energy, but in a more selective and increasingly partnership-driven manner.

    DPF and Membrane Production Delayssecond quarter

    DPF and membrane revenue was approximately $1 million compared with $1.3 million in both the previous year quarter and the first quarter of '26.

    Plastics Segment Customer Purchasing Slowdownsecond quarter

    Plastics revenue was $0.9 million compared to $1.2 million in the second quarter of '25 and approximately $1 million in the first quarter of '26.

    Fixed Production Costs Absorptionongoing

    Improving gross margins level depends on both revenue scale and mix.

    Mitigation: Standardized Commercial Pool, Marine and selected industrial systems are important to that effort because they provide opportunities to reuse engineering, improve procurement, simplify manufacturing and create better operating leverage as volume increases.

    What to watch in Q3 FY26

    5

    Water for Energy Project Status

    Next quarter
    CurrentDelayed, active opportunity, customer internal evaluation restarted.
    TargetProgress in customer internal evaluation and approval process, potential for firm order.

    Why it matters

    This project significantly impacted FY26 revenue guidance; its progression is key to future revenue visibility.

    The project has not been terminated and remains an active opportunity. Our relationship with the customer remains intact, and we continue to engage closely with the new decision makers as they work through their internal evaluation and approval process.

    Q&A highlights

    4

    Where are the near-term opportunities for process improvements to drive profitability (sales, assembly, engineering, etc.)?

    Fei Chen detailed efforts in product standardization across all applications (Marine, Commercial Pool, Water for Industry) to reduce costs and achieve economies of scale. He also highlighted improved procurement processes, leveraging the China joint venture for cheaper components, inventory optimization, production efficiency, and quality control. From a sales perspective, they are using CRM to control resource allocation for commercial results.

    “We actually have been working intensively in the past 1 and 2 years really to make the cost reduction for our processes in order to speed up the profitability. I can mention, first of all, we are doing the standardized product across all the applications, as we mentioned, the marine area, the commercial pool area and also the water for industry area, we are now having our product standardized and that reduce the cost and also provide the scales of economy when the sales goes up.”

    asked by Robert Blum · answered by Fei Chen

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Shift and Capital Allocation

    LiqTech completed a public offering, raising $18 million in net proceeds, which significantly strengthened its balance sheet and repaid outstanding notes. The company emphasizes financial discipline and careful capital allocation, focusing on execution and translating technology into sustainable financial performance. This capital provides flexibility for working capital and targeted growth investments, aligning with a commitment to shareholder responsibility.

    02

    Market Focus Refinement

    The company is refining its go-to-market strategy, particularly for Water for Energy and Water for Industry. In Water for Energy, the focus shifts to strategic commercial partnerships to accelerate market penetration. For Water for Industry, a more targeted approach is adopted, concentrating on applications like the steel industry where clear customer needs and technology fit exist, aiming for repeatable and scalable opportunities.

    03

    Water for Energy Project Delay

    A major Water for Energy project, previously expected to contribute revenue in 2026, experienced delays due to organizational changes at the customer, requiring a restart of internal evaluation processes. While the project is not terminated and the underlying need for technology remains, this delay significantly impacted near-term revenue visibility and necessitated a revision of full-year guidance.

    04

    Industrial Wastewater Traction

    LiqTech is seeing increasing tangible opportunities in industrial wastewater, exemplified by a $2.1 million follow-on order from a U.S. steel manufacturer and a new order for a QureFlow QF-6 system from a U.S. customer in Freeport, Texas. These successes validate the strategy of proving technology in demanding applications and scaling from initial installations to broader deployments, demonstrating clear economic and environmental benefits.

    05

    Commercial Pool and Marine Progress

    The Commercial Pool segment achieved record revenue of $1.5 million, driven by standardized QlariFlow platforms, strengthened distribution, and successful installations in Australia, the U.S., and the Netherlands. The Marine segment, supported by its China joint venture, saw revenue of $0.7 million and secured a commercial order for four water treatment systems for EGR-equipped vessels, indicating growing traction in a key market.

    06

    Operational Efficiency and Cost Management

    Management is actively pursuing process improvements to drive profitability, including product standardization across applications, optimizing procurement for raw materials and components, and leveraging the China joint venture for cost-effective sourcing. Efforts are also underway in inventory optimization, production efficiency, and quality control, alongside disciplined management of sales resources to improve cost-effectiveness.

    AI-generated summary of the company’s earnings call. Not investment advice.